Oral Answers to Questions

TRADE AND INDUSTRY

The Secretary of State was asked—

Manufacturing

Paul Flynn: What plans she has for increasing the use of environmentally friendly manufacturing processes.

Jacqui Smith: The Government's Envirowise programme promotes the cost-benefits of improved environmental performance. Companies using the programme are saving more than £220 million each year. Many of them have done so using more environmentally friendly manufacturing processes. Furthermore, £50 million has been allocated under the DTI technology programme to support collaborative research and development projects in waste management and minimisation.

Paul Flynn: Newport has become a major centre of recycling where 750,000 fridges are degassed cleanly and efficiently every year, and 450 end-of-life vehicles are dealt with every hour. The weakness is in finding secondary uses for all the glass, steel and plastics created by the recycling process. When can we organise our plans to ensure that we no longer export plastics to China and, possibly, batteries to France for recycling? We should be working on the secondary uses of recycled materials in order to build an environmentally benign green dawn for British manufacturing.

Jacqui Smith: Well, I know that my hon. Friend is a very able advocate not only for Newport, but in respect of this issue more widely. He has raised the matter with me before at Trade and Industry questions. I recognise the case that he makes for Newport, which has led the way in developing sustainable manufacturing. My hon. Friend identified facilities for capturing CFCs from recycled fridges and for shredding end-of-life vehicles. It is precisely because of the development of such facilities that the UK has sufficient capacity to meet the needs of the end-of-life directive and the waste electrical and electronic equipment directive, which will come into force in the next couple of years. My hon. Friend makes an important point about what subsequently happens to that waste. I reiterate the Government's support through the technology programme, which could cover innovative uses of such waste. The Department is also working on the national industrial symbiosis programme—a business-led programme that brings together businesses to turn waste into resources. With that sort of Government support and the innovations developed by the industries in my hon. Friend's constituency and elsewhere, we should be able to make important progress in this sphere.

Julian Brazier: Following on from the Minister's point about the end-of-life directive for vehicles, how confident is she that the extra costs involved will not simply result in the dumping of more vehicles in the countryside, as happens extensively in my constituency, rather than in a more environmentally friendly approach to manufacturing, as was the original intent?

Jacqui Smith: It is precisely to avoid such effects that the directive is being put in place. I am sure that the hon. Gentleman would welcome the fact that the end-of-life vehicles (producer responsibility) regulations laid before the House in February are due to come into force today. They take into consideration what is known as the "own mark" approach, whereby companies take back the vehicles that they have produced. That restricts the sort of dumping that the hon. Gentleman mentioned and enables the recycling of vehicles to take place. I believe that it will be good for the environment, good for our communities and good for the customers of those vehicles, because they will know where they should be returned to.

Tam Dalyell: In respect of  environmental manufacturing, what is more environmentally friendly in the production of power than nuclear power stations? Some of us believe that the sooner we get on with building another power station at Hinckley, another at Sizewell and another at Hunstanton, the better for all concerned.

Jacqui Smith: I hear my hon. Friend's concerns. He will know that the Government's position, spelled out in the energy White Paper, is to keep that option open. It is also important to invest in the sort of opportunities provided through renewable energy—investment that would, of course, be cut by the Conservatives if they had the opportunity.

Angus Robertson: Does the Minister acknowledge the importance of environmentally friendly disposal and recycling such as rubber tyre shredding and re-use? What are the Government doing to support and promote that important sector?

Jacqui Smith: I know that that sort of activity is important, as my hon. Friend the Member for Newport, West (Paul Flynn) outlined. Important developments in a range of sectors involve recycling and, in some cases, reuse of materials. I identified in my initial answer the considerable investment that the Government are making through the technology programme to examine the whole area of waste minimisation and waste use, particularly encouraging companies to work together with scientific establishments to develop the sort of innovative processes that will enable us to achieve business and environmental benefits in the future.

Deep Coal Industry

Paddy Tipping: When she last met trade union representatives from the coal industry to discuss the future of the deep coal industry.

Mike O'Brien: I last met trade union representatives on 24 February 2005.

Paddy Tipping: I am grateful to my hon. Friend for meeting representatives from Welbeck colliery just last week and for previously meeting representatives from Ellington colliery. These are the most efficient miners in Europe: they are prepared to work flexibly. The Government are prepared to back their efforts with coal investment aid. What pressure can the Government put on the major coal owner, UK Coal, to give the industry a long-term future in our energy plans?

Mike O'Brien: It is enormously important that the coal industry should have a long-term future, not least because the profitable colliery of Dawmill is in my constituency. We want to ensure that pits like Welbeck continue. Obviously, at Ellington, there were issues to do with geology and flooding. We engaged in discussions with UK Coal and sought further drainage at Ellington. UK Coal was unwilling to undertake such work. It is a privatised industry and that is a decision that it is entitled to take. We are continuing to work to keep open Welbeck. We are looking at applications for funding and we believe that once we have studied the details of the proposals from UK Coal, it is highly likely that we will continue to provide some funding.

Laurence Robertson: Given that in a debate in Westminster Hall on 19 January the Minister said:
	"gas supplies might be tight if demand rises to high levels in the coming winter or the one after that,"—[Official Report, 19 January 2005; Vol. 429, c. 265WH.]
	is it not important to halt the decline in the mining industry? I am thinking particularly about pit closures—[Interruption.] I am talking about today and the future of energy supplies. The Government may not want to be concerned about the future of energy supplies, but we are. As the Minister has admitted that gas supplies might be tight in the coming winter or the one after that, is it not important that we consider how we might help the coal industry through clean coal technology, rather than just bury our heads in the sand?

Mike O'Brien: It is almost as if I could not imagine a Conservative spokesman having the brass neck to stand up in the House of Commons and suggest that the actions of this Government, who have put so much into supporting the coal industry, could in any way be compared with the destruction of the coal industry under the Conservative Government. It is beyond belief that any Conservative Front-Bench spokesman could have the brass neck to do that. We have put substantial amounts of coal aid—£57 million worth—into the coal industry.

Stephen O'Brien: That is just words.

Mike O'Brien: No, it is not just words; taxpayers' money is supporting the coal industry to ensure that our coal industry has a long-term future. We are also providing to the cleaner coal technologies project further funding—some £4 million—in support of new technology, and we are in the process of developing a further carbon abatement technology strategy, which we hope will be announced later this year. The Government are making significant investments, unlike the destruction that the Tories wrought.

Martin O'Neill: While agreeing with my hon. Friend that there is often more rejoicing in Heaven when one sinner repents, what we have just heard stretches the imagination a bit far. Does he recognise that it is all very well to talk about successive technologies, but we have coal-fired power stations capable of being switched on in far shorter periods than virtually any other technology? It is in that way that the gap can be filled. If we are to be committed to coal, we must recognise that it will nevertheless be dirty and that there will be a need for balancing technologies, such as those provided by nuclear.

Mike O'Brien: Certainly we have to ensure that any new carbon abatement technology for fossil fuel power generation—we hope to publish that strategy shortly—will need to consider the need to reduce carbon dioxide emissions. A key way of doing that in the long term is by developing sequestration and carbon capture. The research into that, both in the private sector and with Government support, is something that the coal industry can look to for the long term. Of course, we want to see diversity in our energy supplies and in the coming decades that will include not only coal, but nuclear power.

Dennis Skinner: Does my hon. Friend the Minister recall that on this day, 3 March, 20 years ago, the miners' strike ended? At that time, we had 170 pits, a clean coal technology plant in the offing in the south Yorkshire coalfield, and the coal industry was publicly owned. By 1997, when the Tories were kicked out, all those had gone and only 17 pits remained. If we want to sustain the tiny remains of our coalfield, we need to get rid of the major producer, UK Coal, because it is interested only in the development of its 49,000 acres of land. It is a property company in disguise, and we should do what we did with rail—intervene and put someone else in charge. Then we could save the remaining pits and introduce the new clean coal technology that the Tories got rid of. Then we would be doing something right.

Mike O'Brien: My hon. Friend is right to draw attention to the past and the way in which the Conservatives destroyed the coal industry. When I was first selected to stand for Parliament, my constituency had four pits: it now has one, and we want to maintain it. As for UK Coal, it has taken advantage of the support offered by investment aid and is also investing £150 million between 2004 and 2006 to access reserves and maintain employment in viable mines. I have met recently with the bosses of UK Coal and made it clear that we are looking to them to ensure that we have a long-term coal industry in this country and to keep the investment flowing.

Trade (United States)

Bernard Jenkin: What recent representations she has received from United Kingdom companies concerning trade with the United States.

Patricia Hewitt: My Department and I are in regular contact with British companies on trade issues, including in relation to the US. Recent subjects covered include closer EU-US economic co-operation, the Boeing-Airbus trade dispute and technology transfer.

Bernard Jenkin: Well, I am glad that the Secretary of State mentioned technology transfer, but I am surprised that she did not mention the representations that she will have received from British Aerospace and other defence contractors about the disastrous effects of lifting the EU embargo on arms to China. Is she aware that Richard Lugar and Joseph Biden, the Senate leaders from both parties, have made it clear that defence technology transfers from the other side of the Atlantic to our defence industries will be banned if the arms embargo to China is lifted? Which is more important—selling arms to a corrupt regime in China with an appalling human rights record or sticking up for the British defence industry and Anglo-US relations?

Patricia Hewitt: The hon. Gentleman will be aware that we have pressed the Administration and Congress to lift long-standing and unjustified restraints on technology transfer to British defence companies. As for the arms embargo on China, my right hon. Friend the Foreign Secretary has spelled out not only our position on that, but the reasons for it. Let me reassure the hon. Gentleman, as my right hon. Friend did, that we already have in place some of the strictest controls on the export of arms and dual-use technology in the world and they will continue to apply to China, as they do to every other country.

Hugh Bayley: Will my right hon. Friend remind the House of just how important our trade relationship with the US is? It is by far our biggest trade partner. Since Labour came to power, our policies have hugely increased our trade balance with the US, from less than £500 million under the Conservatives to £14,500 million. The longer we keep our strong trade relationship with the US, the better. Nit-picking at the corners, as the Tories do, does not help one little bit.

Patricia Hewitt: My hon. Friend is absolutely right. The performance of British exporters in the American and other world markets has been absolutely superb, helped of course by the fact that we have a strong economic policy here in Britain, and also by the unprecedented investment that we are making in science and innovation, which of course is what will keep British business competitive in the United States and in the rest of the global economy. That investment in our science base, in technology and in innovation would all be put at risk by the public spending cuts that the Conservative party is promising.

Malcolm Bruce: Is not the Secretary of State concerned that BAE Systems is withdrawing from its European investments in Scandinavia? It has done so, and the report is that it will sell its stake in Airbus, shedding thousands of jobs in the UK in order to increase its presence in the United States, on the basis that this is the only way that it can secure defence contracts. Is not that a pretty poor return for being America's closest ally?
	On arms control, can the Secretary of State comment on reports that her Department is considering privatising the export control organisation? What signal would that give for tighter control and accountability, not just to the United States but also in the middle east and the far east and countries such as Indonesia?

Patricia Hewitt: Well, the hon. Gentleman mentioned Airbus. Let me say that that is one of the most successful companies that we have in Britain; British Aerospace understands that very well. We have recently seen, of course, the launch of the A380, which would not have been possible if it had not been for the commitment of the British Government to launch an enormously successful programme—one that the Conservative party would wish to scrap.
	On the issue of the Export Credits Guarantee Department, I have not seen the reports that the hon. Gentleman refers to, but let me say that there are no plans to privatise that organisation; indeed, we are strengthening it and have just put in new management.

Barry Sheerman: Does my right hon. Friend agree that there is an enormous export market in the United States, but that the United Kingdom is rapidly becoming a country of small and medium enterprises—not very large enterprises—and that it is those enterprises that need to access the American market? Does she agree that there are some very big hurdles and barriers for small and mediums? What is this partnership that was much vaunted between the Foreign Office and the Department of Trade and Industry that was supposed to be so helpful to small businesses? Is the Duke of York still employed there, and what is he doing?

Patricia Hewitt: Let me reassure my hon. Friend that UK Trade and Investment, which is the agency jointly funded and sponsored by the Foreign Office and my Department, is enormously successful, particularly in relation to small and medium-sized companies. Through UKTI, we are helping unprecedented numbers of smaller companies to break into export markets—many of them, I am delighted to say, through passport to export, are now succeeding in entering and selling in the United States market. I am sure that my hon. Friend and everyone else, at least on the Government side of the House, would welcome UKTI's success and deplore the proposal from the Conservative party, which would effectively do away with UKTI.

Several hon. Members: rose—

Mr. Speaker: Order. Now that we have had a few propaganda statements, may we just have questions and answers?

James Arbuthnot: Why is it that the United States' export credit agency is so much more effective and internationally competitive than our own ECGD? Could it be because we have wasted hundreds of thousands of pounds on losing court cases? Does not the Secretary of State think that it would be right to issue an apology to the Treasury, or indeed to the taxpayer, for the court case she has just lost?

Patricia Hewitt: I am astonished that the right hon. Gentleman should seek to attack our export credits agency by comparison with the United States. If there is any difference in the support provided, it is only because a larger subsidy is given in the United States.
	As for the recent court case, we did not lose it; we settled it. [Interruption.] We settled it because, although I believe that the ECGD made the right changes to its procedures last December, I accept that it would be helpful to consult more widely on those changes in the interests of our exporters, as well as transparency in the system. That consultation is now under way, and I am sure that the right hon. Gentleman will contribute to it.

Data Protection Scams

Si�n Simon: What steps the Department is taking to tackle data protection scams.

Gerry Sutcliffe: The Department for Constitutional Affairs has policy responsibility for the Data Protection Act 1998 and the Information Commissioner is responsible for administering and enforcing the DPA.
	I believe that the question actually relates to fake invitations for people to renew their internet domain names. I should like to thank my hon. Friend for giving me the opportunity to warn members of the public about that kind of dishonesty. If in doubt, people should consult their internet service provider, their domain name registration company or their trading standards department before responding to any invitation to part with their money.

Si�n Simon: My constituent, Mr. Ray Woods, runs one of many small businesses in Erdington that have recently had intimidating letters telling them that to comply with new data protection regulations, with which they are apparently failing to comply, they need only send a relatively modest cheque to a strangely anonymous address and everything will be sorted out. It is obviously a fraud and a rip-off. What will the Minister do to track those people down and put a stop to it, and what may be done about some stiffer penalties to make it less worth while?

Gerry Sutcliffe: We have given greater powers to the Office of Fair Trading through stop now orders, but I agree with my hon. Friend that we must educate the public about the vast range of scams of this kind, which cost the British economy millions of pounds. There are sanctions, but it is no good just looking at the enforcement side. I am pleased about the number of campaigns that are taking place either through the Office of Fair Trading national scams campaign or through the media, which I want to praise for highlighting many scams. There are penalties for fraud, but we need to educate people not to part with their money unless they are certain of the information that they are given.

Sydney Chapman: Further to the point made by the hon. Member for Birmingham, Erdington (Mr. Simon), will the Minister confirm that more and more scams are now being perpetrated against small businesses, and that, since those cannot be dealt with by stop now orders issued by the Office of Fair Trading, it is necessary to rely on the Control of Misleading Advertisements Regulations 1988? Is not it time now for more comprehensive and decisive legislation to deal with scams?

Gerry Sutcliffe: We always keep under review the need for more regulation, if that is appropriate, but clearly, we do not want to put burdens on business. However, organisations such as Nominet already have powers and pursue complaints and prosecutions against companies that perpetrate such acts. We shall continue to review this, because the number of scams, and the number of types of scam, are increasing. We want to try to remain ahead of the game, but we always keep such matters under review.

Solar Photovoltaics Programme

David Chaytor: What steps she is taking to implement the Government's opportunities for all and energy White Paper commitments to a 200212 solar photovoltaics programme; and if she will make a statement.

Mike O'Brien: The Government are committed to supporting the development of the photovoltaic sector and other small-scale renewables. I announced a 6 million extension to the major PV demonstration programme last September. The programme is expected to continue until March 2006, with spending taking place on projects until March 2007. It is intended that a low-carbon buildings programme should supersede those two initatives.

David Chaytor: Does my hon. Friend accept that other countriesparticularly, Germany, Japan and the United Stateshave moved much further and faster than the United Kingdom in the development of solar photovoltaics? Does he also accept that continuity of support is essential if that embryonic industry is to grow strong in the United Kingdom? Is he still committed to the original target of between 70,000 and 100,000 solar photovoltaic roofs to be constructed by 2012?

Mike O'Brien: We have long-term commitments that we seek to maintain. Also, the budget for major PV programmes increased from 25 million to 31 million last September, and the budget for the clear skies programme increased from 10 million to 12.5 million, showing the Government's continued commitment. My hon. Friend is right to say that the industry needs long-term commitments because of the stage that it is at. We are prepared to make those commitments, but we need to review the way in which the funding is directed, and ensure that it is directed to the maximum benefit.

Julie Kirkbride: The simple fact is that no matter how exciting some of the new technologies for renewables are, they are still embryonic. The United Kingdom faces an energy crisis in the next 10 to 15 years, when the nuclear reactors are closed down and the 20 per cent. of UK energy that they supply is not made up in renewables. What is the Minister going to do to tackle the UK's energy problems without recommissioning nuclear reactors?

Mike O'Brien: There is certainly substantial investment in developing alternative energy sources; companies such as e.on and others are looking at improving and expanding their power stations; and the rest of the industry is considering developing new power stations. The Government have an open mind on whether we need to move towards a nuclear future. As we set out in the 2003 White Paper, we will look at the issues if and when a proposal comes forward. Today, there is no proposal on the table for any nuclear power station from any private sector source. If one comes forward, we will look at it. It is currently probably uneconomic, and there is also the issue of waste, which needs to be resolved. Until we have some clarity on those matters from the private sector and a serious proposal is made, it is difficult to see that there will be such a programme.

Ann Clwyd: The Minister will know that Tower colliery in my constituency supplies local power stations and that this year it is celebrating 10 years as a workers' co-operative. It is a major employer in my constituency despite the best efforts of the Conservatives to close it down; they argued that it was uneconomic and had geological faults. Will my hon. Friend confirm that the colliery has a future, and an important one, in supplying energy sources in this country and overseas?

Mike O'Brien: Consulting mining engineers have just completed their assessment of Tower's revised coal investment aid application, and my officials are carrying out their own assessment. I hope to be able to give a decision to my hon. Friend shortly. The Margam project may not however qualify for support under EU regulations, but we are prepared to explore the possibility of state aid with the European Commission. Indeed, I am meeting the Energy Commissioner, Andreas Piebalgs, this afternoon and I hope to refer the matter to him.

Nigel Evans: The Government talk about investment in renewables, but they seem to be obsessed for some reason with wind turbines. The Minister knows that wind turbines work only to a third of their capacity and that when it is too windy they have to be switched off. Is it not about time that he looked more comprehensively at the energy suppliers in this country, and considered solar power as one of the more exciting possibilities, taking some of the subsidies away from wind turbines and putting them into solar power in order to secure a better future for everyone in this country?

Mike O'Brien: As I understand it, the Conservative party says that it too is committed to a future with renewables and to the sort of targets that we have set. Unfortunately, while the Government have a clear strategy for hitting those targets, the Conservative party has a big gap in its strategyindeed, it does not have a strategy and just wants to play the opportunist game as usual.
	We are investing 117 million in capital grants for offshore wind farms, approximately 66 million in biomass capital grants, 31 million in solar, 12.5 million in the clear skies programme, 50 million in marine renewables, 19 million in industry-led research and development, and 4 million in research under the Engineering and Physical Sciences Research Council's Supergen project. We are investing in renewables; when the Conservatives were in government, they did nothing.

Clear Skies Initiative

Colin Challen: What the take-up of the clear skies initiative has been since the start of the initiative.

Nigel Griffiths: The clear skies programme to promote renewable energies was launched in 2003. The target was to achieve 2,800 projects for individuals and households and 275 community-based projects by 31 March 2006. However, the scheme has already benefited 4,767 households or individualsmore than 70 per cent. above our target, with 13 months and tworounds of funding of the scheme to goand 274 community projects, which is one short of our target.

Colin Challen: I am grateful for that reply, which shows that the Government are seriously committed to supporting micro-renewables. The clear skies website shows more than 300 products now accredited under the programme. Given that the programme has just over a year left to run, is my hon. Friend satisfied that new companies bringing to the market new products for which they seek accreditation will be able to benefit from clear skies?

Nigel Griffiths: Yes, I am. Yesterday, I spoke to a pioneering manufacturing company that was full of praise for the DTI's staff and contractors, who helped it to overcome the technical and safety issues that are common in new technologies. With application forms for consumers who want to take advantage of the programme being two pages long and those for contractors, manufacturers and producers eight pages long, I think that we have done everything we can to ensure that those who have bright technological ideas can benefit from that fantastic programme.

Engineering (West Midlands)

Peter Luff: what assessment she has made of the prospects for the engineering sector in the west midlands.

Jacqui Smith: Engineering is central to the strength of our manufacturers and the Government are committed to a strong and vibrant engineering and manufacturing economy. Advantage West Midlands predicts that, by 2010, west midlands manufacturing will contribute 24 per cent. of the region's gross value added compared with 17 per cent. nationally. The west midlands regional economic strategy identifies the strength of the engineering sector as an opportunity, particularly in the exploitation of environmental technologies.

Peter Luff: Is the Minister aware that companies feel that the west midlands engineering sector's successes, of which there are manya fact that we should celebrateare achieved despite the Department of Trade and Industry, not because of it? Apart from the manufacturing advisory service and aspects of export promotion, they can identify nothing of any value that the DTI does. They believe that the Department now exists to put obstacles in front of enterprise, not to support it as it should. What is she going to do about that?

Jacqui Smith: I agree with the hon. Gentleman about the success of the west midlands engineering sector, which we should celebrate, but I strongly disagree with him about the views of engineering and manufacturing companies. At a recent event on manufacturing organised by a west midlands chamber of commerce, I was pleased to hear about manufacturers' support not only for services such as the manufacturing advisory service, which he mentioned, but for grants supporting innovation, which the Conservatives would cut, and about companies that have benefited from regional selective assistance, now selective finance for investment, which the Conservatives would cut. Of course there are challenges for our

Mr. Speaker: Order. I have given an instruction to Ministers on how to conduct themselves at the Dispatch Box. They will not defy the Chair.

Ken Purchase: I know that the Minister will endorse my congratulations to west midlands manufacturers on the massive productivity gains that they have made in recent years, but in the Department's otherwise admirable efforts to civilise our working conditions, especially through family-friendly policies, will she remain acutely aware of the disproportionate impact on smaller companies of maternity leave and other important measures and the need to keep those measures under constant review?

Jacqui Smith: My hon. Friend is right not only about the support that has been provided, but about the impact on small and medium-sized companies of the important changes that have been madeoften by the companies themselves in recognition of the importance of retaining high-quality workers, particularly women while they have families. That is why the consultation document that we issued on Monday makes it clear that we will consult business and that we need to look for ways to bring more certainty into the system for small and medium-sized enterprises.

Stephen O'Brien: Last week, the Secretary of State admitted that, under the Labour Government,
	one of the biggest frustrations for everyone running a business today is the amount of regulation coming out of Europe.
	We all agree, therefore, that European regulation is a crushing threat, impeding the prospects of the engineering sector in the west midlands and of all parts of British business. Will the Minister now confess what proportion of the 8.9 billion-worth of extra regulation heaped on British business last year came directly from Europe, how much came from Ministers and officials gold-plating EU requirements, and how much was dreamt up by the Labour Government themselves?

Jacqui Smith: We go out of our way to ensure that we do not gold-plate European legislation and we have argued strongly for better competitiveness impact tests in Europe. We have done so with great effect with respect to the chemicals directive and billions of pounds-worth of burdens have been reduced because, while the Government are willing to engage in Europe and to recognise the benefits, we are also prepared to make the arguments for competitiveness. It is only by being willing to engage in that way that we can secure the benefits that we have secured.

Stephen O'Brien: The complacency of that response cannot disguise the fact that more EU directives have been implemented under the Labour Government than was the case in the preceding quarter century of our membership. Engineers and manufacturers know exactly who is to blame for the ballooning burden of regulation, which is now heading towards a staggering 40 billion.
	Another key concern of west midlands engineers is skills. The most recent study by the Engineering Employers Federation on manufacturing productivity compares the UK with France and Germany, and shows that only UK managers rated the skills available to them as having a negative impact on their attempts to improve productivity. What urgent measures are the Government taking to abolish the inefficient Learning and Skills Council and to create a scheme of vocational grants, with funding following the students so that young people in the west midlands and the rest of the United Kingdom receive the skills training that employers demand and which the Conservatives have promised?

Jacqui Smith: I recently had dinner with people representing business leaders and skills providers in the west midlands and we looked at what we can do through the regional skills partnerships to make sure that, as the Government have promised, employers' voices are central to the delivery of skills. I would also point to initiatives such as the automotive academy, which received funds of 15 million following the report by the automotive innovation and growth team. It is based in the west midlands and is making a genuine difference in developing the necessary skills to ensure the continued success of our automotive industry. Those practical initiatives, backed by investment, will make a difference to skills in the west midlands and to support for our engineering and manufacturing companies.

Adrian Bailey: May I draw the Minister's attention to a problem that has emerged among some small and medium metal forming companies in my constituency? It appears that the steel supplier is demanding unusually restrictive credit terms, so they have cashflow problem because they have to pass those restrictions on to their customers. In the past, the Department has always said that big suppliers and companies must treat their customers fairly and equitably. Can the Minister do anything to reinforce that message?

Jacqui Smith: My hon. Friend takes very seriously theconcerns of metal forming companies in his constituency and I was pleased to meet a delegation that he recently brought to see me. His concern is fair, given the fact that the steel industry was in difficulties for several years but is now in a much more profitable and successful position. I would certainly expect major steel companies to look at the pressures that they are exerting on their customers and to make sure that their success is passed down through the chain. If there are specific examples that my hon. Friend would like to raise with me, I would be interested to hear them. However, the current success of the steel industry puts a responsibility on the supplier to deal fairly with the important companies in my hon. Friend's constituency.

Work-life Balance

Tony Lloyd: What plans she has to improve work-life balance for older people.

Patricia Hewitt: Many employers offer flexible working to all their employees, including older workers, because they know that work-life balance policies are good for their business as well as for the employees. Earlier this week, I launched a consultation on our proposals to extend the scope of the existing flexible working law to carers of sick and disabled relatives.

Tony Lloyd: I welcome my right hon. Friend's initiative, certainly with respect to carers. As there is a disproportionately high number of carers among older workers, should we not consider extending to them the same kind of flexibilities that we have accepted are necessary for younger families to enable them to have a proper and functioning family life? I hope that my right hon. Friend will pursue that and not listen to those who seek to divert her, because this is a part of the working population that really does need such assistance.

Patricia Hewitt: I welcome my hon. Friend's comments. He is absolutely right. The law that we introduced nearly two years ago for parents of young children has already had a dramatic effect. Nearly 1 million parents changed their working hours in the first 12 months of that law coming into effect, and the vast majority of employers say that they have no difficulty in accommodating those requests for a change in working hours. My strong view is that carers of elderly and sick and disabled people, who are doing a wonderful job for the whole community and whose efforts deserve even greater recognition, should be a priority in any extension of that successful law.

Eric Forth: Given the unique contribution that people of maturity can bring to the workplace, not least here in this very House of Commons, is the Secretary of State looking positively at what can be done to make it easier for older people to continue to work and make a contribution, given our undoubted skill shortages and the desire of older people to work on and to make that contribution? Will she consider this in a comprehensive way and satisfy herself that everything is being done that can be done to make it as easy as possible for older people who want to continue to work to do so?

Patricia Hewitt: Speaking as a 56-year-old, perhaps I can declare a personal interest in the subject. I welcome the right hon. Gentleman's support for the steps that we are taking, such as the age discrimination law that will come into effect next year, and the accompanying measure that spells out that retirement enforced by an employer before someone reaches the age of 65 will no longer be lawful unless it can be justified on objective grounds, such as health and safety reasons. For people over the age of 65 who want to carry on working, we will be extending the right to request flexible working, which, as I said, has already been so successful in the context of parents and young children. I look forward to his support for those new regulations that will help business and older workers alike.

Brian Jenkins: My right hon. Friend knows that now we consider older workers to be those aged over 65. When do we intend to extend employee rights to post-65s in employment?

Patricia Hewitt: That is exactly the issue that we have been considering in the context of the age discrimination law that we will bring into effect next year. After much consultation, we reached the view that, as I have just said, it makes sense to keep a default retirement age, but only at 65, which we will review after five years, and we will introduce the flexible working laws for workers above the age of 65. As my right hon. Friend the Secretary of State for Work and Pensions recently said, we will also ensure that, if someone over the age of 65 is made redundant, their service beyond 65 will also count towards the calculation of their redundancy payment.

Software Patents

Desmond Swayne: If she will make a statement on her policy with regard to European legislation on software patents.

Douglas Alexander: The Government believe that it is important to permit the patenting of certain types of software-related inventions that are vital to many high-tech industries, but at the same time we are also concerned to prevent a drift towards widening the scope of patentability. The current draft text of the computer implemented inventions directive achieves that balance.

Desmond Swayne: Does not the fact that those who are crying foul about the directive's text are among the small software developers in our constituencies, and those who are enthusiastic for it are the monopolists and oligopolists, give the Minister some unease and pause for thought?

Douglas Alexander: Of course patents can be of great assistance to small and medium-sized enterprises when taking on larger businesses, although I know that the matter is of concern to the hon. Gentleman and in particular to one of his constituents. That is why there have been discussions with the Patent Office and my noble Friend Lord Sainsbury, and why we have facilitated a series of workshops on the nature of the harmonisation. Invitations to participate in those workshops have been extended to approximately 540 individuals and organisations. If it would be of assistance to either the hon. Gentleman or his constituent to attend one of the workshops in the weeks and months to come, I can ensure that an invitation is forthcoming.

MINISTER FOR WOMEN

The Minister for Women was asked

Apprenticeships

Claire Curtis-Thomas: What opportunities are available for women to undertake apprenticeships in science, engineering and technology-related subjects.

Jacqui Smith: Apprenticeship opportunities are open to all candidates, regardless of gender or ethnicity. However, the Government recognise that women and girls have traditionally not taken up apprenticeships in those subjects in significant numbers. We are working across Government to tackle the barriers that hinder female participation in science, engineering and technology, including through apprenticeships. For example, through our work in the manufacturing forum, we have established a sub-group on the image of manufacturing to look at promoting the sector to key audiences, including women.

Claire Curtis-Thomas: I congratulate my right hon. Friend on the publication of the Equality Bill yesterday, with the intention to establish an equality and human rights commission. That is a marvellous step and I am proud to be associated with it.
	My right hon. Friend will know that I am a fitter by trade and had a wonderful career in the engineering profession. Many people in this country could enjoy a career in that profession, but we have a perennial problem attracting women, so I am delighted with the initiatives that the Government are taking. How will we use the women's resource centre that is being established to get at the statistics that will allow us to determine whether we are being successful and to target our resources appropriately, supporting young and old women who wish to go into engineering, which will lead to a productive and rewarding career?

Jacqui Smith: My hon. Friend is a good role model and advocate for women in that respect. She points to the Government initiative to establish the UK resource centre for women in science, engineering and technology, which was formally launched on 16 September last year, and to which I think she will contribute in the near future. She is right that an important function of the centre is to maintain, collect and disseminate statistics on women's involvement in the sector. However, another function is to ensure that we promote good practice among employers and advise them about the sorts of things that they should do to encourage women into the sector and to keep them there.
	That, along with a range of other activities, can make a practical difference to ensuring not only that women have opportunities in science, engineering and technology, but that those opportunities help employers to deal with the skills shortages that they undoubtedly face. Those employers would be helped in that if they recruited from the whole pool of talent in the country, as they would be doing if they focused on women and girls.

Nicholas Winterton: In supporting what the hon. Member for Crosby (Mrs. Curtis-Thomas) said about the importance of attracting more young women, let alone young men, into engineering, technology and allied subjects, does the Minister accept that the way to do that would be to put greater emphasis not on higher education but on vocational education, both post-16 and even earlier, in secondary schools? That would enable young peopleyoung men and womento develop a skill that they could put to good use in their adult lives, to the betterment of the prospects of engineering and technology in this country.

Jacqui Smith: The hon. Gentleman is absolutely right, which is why I am sure he joins me in welcoming the announcements that my right hon. Friend the Secretary of State for Education and Skills made in response to the Tomlinson review. I refer in particular to the proposals for a new 14 to 19 diploma framework, to the greater emphasis on vocational education while also ensuring that young people have the basic literacy and numeracy skills that are so important, and to the work on developing new ways of offering apprenticeships, which may well include the opportunity of doing an apprenticeship and then studying for a foundation degree. Higher education and vocational education are therefore not in conflict with each other. Some people can take advantage of both routes and the reforms being introduced by the Government will ensure that they have equal value and the support that they deserve.

Parental Needs

Win Griffiths: What representative groups she has met in the past three months to discuss the needs of parents.

Patricia Hewitt: I regularly meet a wide range of representative organisations to discuss the needs of parents.

Win Griffiths: I thank my right hon. Friend for the work that she does in this field, but has she had an opportunity to look at the report from the Relationships Foundation entitled Keeping Time for Children, which was compiled by the National Centre for Social Research? It shows that parents now have to spend much more time at work, and therefore away from home. Will she meet foundation representatives to discuss the report and find ways to lessen the pressure on parents to work extra hours to make ends meet?

Patricia Hewitt: My hon. Friend makes an extremely important point. I have not had an opportunity to have a look at that report, but I shall do so with interest, and of course I should be delighted to meet representatives from the foundation to which he referred. I completely agree that we must do even more to make it easier for parents to manage the stress incurred by making a living and bringing up children. Many people have to care for elderly parents as well. That is exactly why the consultation that I launched on Monday is looking at how we can improve maternity leave by, for example, extending paid leave by another three months and making it possible for that leave to be transferred to the father. Another of our aims is to extend flexible working hours. I am glad to say that the Government's implementation of the flexible working hours legislation and the working time directive means that Britain's long working hours, which rose inexorably for over a decade, have fallen over the past three or four years.

Eleanor Laing: I welcome the Secretary of State's action: after eight years of this Government, she has announced yet another consultation process, but at least she is going in the right direction. Does she agree that parentsand especially mothersdo not need to be patronised by central Government and told what they have to do to look after their children and balance the difficulties of a working life and parenthood? Many women in Britain today in effect do two jobs. Does she agree that those women should be thanked, supported and given the flexibility demanded by the fact that every family is different? Should not they be able to choose their own arrangements for child care and the care of elderly relatives?

Patricia Hewitt: It is precisely because we want to help parents give their children what they see to be the best start in life that this Government have doubled maternity pay since 1997, raising it from 55 to 104. We have also doubled paid maternity leave, which lasted for three months when we were elected but is now six months. We intend to increase that to nine months by 2007 and to 12 months over the next five years. That is also why we introduced the law on flexible working, although I regret that some Opposition Members said that that was just another burden on business and did not recognise how crucial it was for parents. It is why we have also extended nursery provision. Parents can now ensure that their three and four-year-old children have nursery education. Those are the sorts of practical measures that give parents choice and support. At least on this side of the House, we believe in action not words.

Chris Bryant: Many of the poorest families in my constituency find that they have two main needs. First of all, they need a few extra hours in the day, but I know that my right hon. Friend can do nothing about that. However, their second need is a decent income, so that they can look after their children properly. The recent increase in the national minimum wage will make a dramatic difference for many of my constituents, but how can we make sure that the other forms of support available for poorer families get through to them?

Patricia Hewitt: My hon. Friend is right about the minimum wage and I am delighted, as I know he is, that, thanks to our strong economy, we were able to announce last Friday that it will indeed rise to over 5 an hour this October. That will be a huge help to hard-working families and we both know that, alongside the working tax credit and the child tax credit, the minimum wage is delivering enormous practical help to low-income families in our constituencies and across the country.

Equal Pay

Tony Lloyd: What steps she plans to take towards closing the differential in pay between men and women.

Jacqui Smith: We set up the women and work commission to recommend action to tackle the causes of the gender pay gap, and I look forward to its interim report later this month. But the Government have led by example and I am proud of the fact that all 88 Government Departments and agencies have completed equal pay reviews.

Tony Lloyd: My right hon. Friend will be aware that thechair of the women and work commission, Margaret   Prosser, recently talked forthrightly about the undervaluing of the work that women do. This is an issue in both the private and public sectors, the latter having real implications for the Government. None of us expects the problem to be resolved overnight, but are the Government prepared to commit themselves to ensuring that we put the necessary resources into achieving a narrowing in the gender pay gap?

Jacqui Smith: Absolutely, and my hon. Friend is right: we need to address not just occupational segregation but the value that we place on jobs that have traditionally been done by women. Of course, we have already taken action in the public sector, such as the national health service's Agenda for Change initiative. Instead of depending on traditional views of work and the associated pay, we have taken a proper look at what such work involves and remunerated it accordingly. In doing so, we have of course put considerable investment into the health serviceindeed, we have a responsibility to do that across the public servicesand I give my hon. Friend a commitment that that will continue to happen.

Business of the House

Oliver Heald: Will the Leader of the House please give the business for next week?

Peter Hain: The business of the House for next week is as follows:
	Monday 7 MarchProceedings on the Income Tax (Trading and Other Income) Bill, followed by motion to take note of various European documents relating to future European Union finances, followed by motions relating to the House of Commons Members' Fund.
	Tuesday 8 MarchRemaining stages of the Road Safety Bill.
	Wednesday 9 MarchEstimates [2nd allotted day] (1st part). There will be a debate on the future of the BBC, followed by consideration of Lords Amendments.
	Thursday 10 MarchProceedings on the Consolidated Fund (Appropriation Bill) followed by, if necessary, consideration of Lords Amendments.
	Followed by a motion to suspend support for Members who have chosen not to take their seats, followed by, if necessary, consideration of Lords Amendments.
	Friday 11 MarchThe House will not be sitting.
	The provisional business for the following week will be:
	Monday 14 MarchSecond Reading of the Education Bill [Lords].
	Tuesday 15 MarchSecond Reading of the Inquiries Bill [Lords].
	Wednesday 16 MarchMy right hon. Friend the Chancellor of the Exchequer will open his Budget statement.
	Thursday 17 MarchContinuation of the Budget debate.
	Friday 18 MarchPrivate Members' Bills.

Oliver Heald: I thank the Leader of the House for the business. Is there now no prospect before the Easter recess of a debate on foreign affairs, so that we can discuss the situation in the middle east and Africa? Will he remind the Chancellor ahead of his Budget of the tax changes promised when the Civil Partnership Bill was debated? Can he confirm that those promises will be honoured?
	Will Monday's European debate provide an opportunity to take stock of the Lisbon strategy and of the growth and stability pact, both of which appear to be in trouble if the latest news from Germany is true? If not, could we have a statement on those issues?
	When can we debate today's damning Education and Skills Select Committee report on the so-called UK e-university? It shows that only 900 students have taken part in this 50 million projecta whopping 40,000 per student. It also finds that there was inadequate research, a skewed focus and a failure to work successfully with the private sector. So what did Ministers do? They paid bonuses to the senior executives. Should not Ministers have done their homework before throwing vast sums of public money at a project that nobody wanted? Is that not yet another piece of Government incompetence to rank with the millennium dome, the Child Support Agency computer and the tax credits administrative fiasco? The two computer projects that I have mentioned were the work of EDS, to which the Government have this week given a 4 billion contract to supply defence computers. Can we have a debate on the rewards of failure, so that we can seek serious assurances about that massive contract?
	After yesterday's Appeal Court ruling about religious clothing in schools, can we expect a statement about the full effect of the ruling and the guidance that will now be given to schools?

Peter Hain: I will certainly bear in mind the hon. Gentleman's remarks about religious clothing in schools.
	I can promise the hon. Gentleman a debate in Westminster Hall on foreign affairs before the end of March. He has repeatedly raised that point, which we are anxious to do something about, and I am happy to agree to a debate.
	On the tax arrangements relating to the Civil Partnership Act 2004, I will certainly make sure that the Chancellor of the Exchequer and those who are responsible for the legislation are aware of the points raised by the hon. Gentleman.
	There will be an opportunity to raise a number of European Union issues. The Lisbon reform programme is about making the EU much more competitive, particularly in relation to the competitive threat from east Asia. It is an important British agenda and it must be accelerated. The Government are trying to accelerate it, and our presidency will provide an opportunity to do so. There will be a chance to debate how the growth and stability pact should be progressed, reformed and implemented.
	The hon. Gentleman described the report on the UK e-university as damning, and the Secretary of State will want to take close account of that matter. He also mentioned Government incompetence, but there is no greater example of Government incompetence than the poll tax, for which the Conservatives were responsible. I am surprised that the hon. Gentleman has the temerity to raise the issue of Government incompetence.
	On computer contracts, the reliability of IT contracts to Government Departmentsand, indeed, to the private sectoris a problem right across the world, and we are having some success in addressing that issue.

David Hamilton: Earlier today, one of my hon. Friends mentioned that it is the 20th anniversary of the miners' decision to return to work. I was unfortunate enough not to return to work, because I was sacked along with just fewer than 1,000 people. On Monday, the BBC showed a good and fair programme about the miners in the face of great opposition from Conservative Members. At the end of that programme, the Iron Maiden[Hon. Members: Hear, hear]the then Prime Minister, referred to the enemy within, when she was talking about miners and their families. Do you, Minister, think that she should apologise to those miners and their families?

Peter Hain: I certainly doI represent a mining community. [Interruption.] Well, I am not astonished by the growl of approval from the Conservative Members about bringing back Thatcher.

Eric Forth: Yes.

Peter Hain: I am not surprised, given the dreadful leadership provided by the leader of the Conservative party. I join my hon. Friend the Member for Midlothian (David Hamilton), who is a former miner, in acknowledging the suffering that miners' families experienced and their appalling treatment by the Thatcher Government. When Mrs. Thatcher was Prime Minister, lots of ordinary families suffered from her oppressive treatment, which would make an excellent subject for debate. The BBC programme is an excellent example of pointing out the truth, not least about the behaviour of the then Government.

Mr. Speaker: Order. I hope that we can return to the business for next week.

Paul Tyler: On the business for next week, Mr. Speaker, can the Leader of the House confirm that he recognises that his primary responsibility is to this House, not to the Government, for the orderly arrangement of parliamentary business? Will he make a statement on the primacy of the House? As he knows, the Prime Minister and other Ministers constantly object to cross-party plans for reform of the composition of the House of Lords on the grounds that it could undermine the predominance of the House of Commons. Yet the Home Secretary has apparently decreed that the Lords should be the place where substantive amendments to his legislation on house arrest are discussed, having failed to provide a real opportunity for this House to debate them. He has apparently decided that compromise can be achieved only at the other end of the building rather than here. That is where the discussions will take place, and that is where the substantive debate will take place.
	Will the Leader of the House confirm that he stands by his statements on many occasions that the predominant role in the business of Parliament lies here? Will he confirm that elected MPs should take decisions rather than, in his own phrase, unelected peers? How can he defend the contempt that other members of the Government seem to show for the House when compromise and consideration seem to be the rule only for the other place? He announced a few moments ago that we will have very few hours in this place to discuss amendments to an important Bill while considerable time is being devoted to it in the other place.
	Ministers frequently say that the legitimacy of the Lords is, in some way, not complete. Will the Leader of the House indicate the Government's attitude towards cross-party proposals for the improvement of the legitimacy of the other place? Has he had an opportunity to study the Bill that I presented to this House with the support of the right hon. Member for Livingston (Mr. Cook), the right hon. and learned Member for Rushcliffe (Mr. Clarke), the hon. Member for Cannock Chase (Tony Wright) and the right hon. Member for North-West Hampshire (Sir George Young)? Will he indicate that the House will have an opportunity to debate those matters, and will he tell us the Government's attitude on them?
	Last Thursday, the Leader of the House gave me an undertaking that the Chancellor would look urgently at the question of tax credits, which are causing much misery to our constituents. He may have seen that The Daily Mirror has taken up the issue and has referred to the fiasco that has left tens of thousands of families in financial crisis. When will I get an answer from the Chancellor, which the Leader of the House promised me last week? Much more importantly, when will all those who have been affected by the appalling fiasco get an answer?

Peter Hain: Obviously, the Chancellor is as anxious to make sure that those issues are addressed as the hon. Gentleman is in, quite rightly, raising them with me. The overall point is that we are delivering more support for low-income families and those on benefit, especially hard-pressed low-income pensioners, than ever before. That is the important point. Some things have gone wrong in the system, and they are being addressed, but I hope that the hon. Gentleman will applaud the Government for giving billions of pounds to the very poorest pensioners and those on low incomes, and for encouraging people into work by supporting hard-working families and making work pay.
	On the hon. Gentleman's first point, about the primacy of the House of Commons, I am happy to repeat my often-stated view that the House is the prime body and the sovereign body, above the House of Lords in Parliament. Of course it is.
	On timing, the hon. Gentleman made a perfectly fair point, but he will recall that consultations were held only the previous Friday with the leader of the Liberal Democrats and the leader of the Conservative party. It was not possible to hold them earlier than that, although it would have been desirable to do so. It was, therefore, in response in part to requests from the Leader of the Opposition and the leader of the Liberal Democrats to see whether consensus could be found that the Home Secretary reflected and came back to the House at the earliest opportunity. He circulated the letter, and I know that there was some concern about who saw what and at what time, but there was an honest intention to circulate it to the House. The Home Secretary, indeed, apologised if Members had taken offence, because he did not intend that.
	It was not possible suddenly to table amendments and it was much better to take the mood of the House and listen to the debate, as we continue to do. Then, we could place amendments in the Lords, which, by the way, will come back to us. In whatever way the Bill is treated in the Lords, it will come back to us, giving a further opportunity to scrutinise it, hold us to account and perhaps consider other amendments, possibly even Government amendments, depending on the situation in the Lords.

Eric Forth: Oh! A concession.

Peter Hain: I am just stating the obvious. I am not saying that that will happen, but simply stating that the Government are dealing with a very difficult situation

Oliver Heald: Of their own making.

Peter Hain: No, not of their own making. It is almost a situation of the House's making, because the House passed legislation in the aftermath of the September 11 attack, but one aspect of it has been deemed unlawful in its application by the Law Lords. We are having to deal with that.
	By the way, there is no question but that the Bill has been given adequate scrutiny. It will have been given at least 17 hours of scrutiny in the Commons. I know that it raises important issues about which hon. Members feel strongly, but I have looked into this matter, so I know that for an 11-clause Bill to receive 17 hours of scrutiny in the House of Commons is quite in line with other emergency legislation. Indeed, in some respects it will have more time

Eric Forth: This is not an emergency.

Peter Hain: I hear what is said from the Conservative Benches, but in that case, let me ask what the Government should be doing. The Law Lords have made a ruling. If we ignored that ruling, the individuals who are currently detained in Belmarsh without trial could simply walk out, yet we would have no control orders in place to deal with that. We now know that the Conservatives, along with the Liberal Democrats, will go into the next election saying that terrorist suspects can walk free without making any attempt to place control orders on them. We now know that that is the officially recognised position of the Conservatives and the Liberal Democrats.

Peter Pike: Is my right hon. Friend able to say where the site of the new visitor centre will be? Is he able to give us any indication of what major work will take place in the Westminster Hall area during the next 12 months? What implications would that have for the use of that part of the building by the House?

Peter Hain: Like my hon. Friend, I am very keen for the project for a proper reception facility for visitors to be implemented as soon as possible. It would provide secure and much more civilised arrangements to allow visitors to come in through Westminster Hall than those that exist at the moment. Thereafter, I hope that the House and the House of Lords will endorse a proper visitor facility on a different site that will enable members of the public to come and enjoy the rich democracy that we have in the House of Commons and find out the way in which it works.

Nicholas Winterton: Will the Leader of the House indicate more precisely when critical international issues regarding the middle east and Africanot least the problems in Sudan and Darfur, and the situation in Zimbabwe, with the continuing dictatorship of the leader of that countrymight be debated on the Floor of the House? The House should become involved in discussing such matters.
	The Leader of the House announced that the Chancellor will deliver his Budget statement on 16 March. Can he indicate when the Second Reading of the Finance Bill will take place so that those of us who might subsequently be involved are able to plan our diaries between now and whenever?

Peter Hain: I have already outlined the progress of the Budget. The hon. Gentleman raises an important point about foreign affairs, especially regarding Africa and the middle east. All those conflicts and problems should be at the forefront of hon. Members' attention. He will know that the Foreign Secretary made a written ministerial statement yesterday about the hugely successful peace conference on the Palestinian-Israeli conflict, which will enable real momentum to be given to the middle east peace process. As I said, there will at least be an opportunity for a foreign affairs debate in Westminster HallI am sorry that I cannot promise that there will be one on Floor of the Houseand I have responded to points made by hon. Members, including the shadow Leader of the House.

Chris Ruane: Will the Leader of the House ensure that we make rapid progress on the Clean Neighbourhoods and Environment Bill? Will he further ensure that we have an early debate on that important subject so that we can find out whether the Opposition would let the Bill through in the event of an early Dissolution?

Peter Hain: My hon. Friend raises an interesting point. The Bill has completed all its stages in this place and is now with the Lords. I hope that there will be unanimous support for the Bill, were an early election and early Dissolution required. It deserves such support because it addresses things that most, if not all, of our constituents feel very strongly about, including fly-tipping, antisocial behaviour, graffiti and noise pollution. It is the Labour Government who are on the side of the ordinary citizen and their neighbourhood, and I hope that the Opposition will join us.

Sandra Gidley: The date of 8 March is international women's day, and in recent years the Government have generously given a significant amount of time to have a debate on women's issues. That has not happened this year, which I find strange in the light of the apparent wooing of the women's vote. Why has no Government time been devoted to this important subject this year?

Peter Hain: I accept that we have not been able to provide time for a debate. The hon. Lady is right to point to that discrepancy. The truth is that we have a very busy legislative programme, including, in the week in which such a debate would fall, consideration of the terrorism legislation. I am providing more time than was originally considered for that legislation in response to requests made by right hon. and hon. Members. However, if we consider what the Government are doingin providing wrap-around child care, more opportunities for women, more support for families and more opportunities for women to work, the hon. Lady will recognise that we are addressing precisely the agenda of equal opportunities on which international women's day has quite rightly commanded our attention.

Tam Dalyell: Further to the reply to the question of the hon. Member for Macclesfield (Sir Nicholas Winterton), it is not good enough to say that major matters of foreign affairs, with great issues in Syria and in relation to Iran, should be transferred to Westminster Hall. This is not proper treatment of the House, it really is not.

Peter Hain: I understand my Friend's point, but I hope that he will accept that I have responded to requests for a debate in Westminster Hall. Indeed, Westminster Hall has some of the finest debates that take place in the House these days.

John Bercow: They get too little attention.

Peter Hain: Perhaps they do receive too little attention, in which case we should work on members of the Press Gallery to attend Westminster Hall much more often. The issues to which my hon. Friend refers, including what has happened in Lebanon recently and the read-across to Syria, the huge change in the middle east and the prospects of democratic pressure running right through the middle east as a result of the successful elections in Iraq, will be debated in due course.

Andrew Hunter: Can the Leader of the House give an assurance that on Thursday there will be sufficient time for a full and meaningful debate on the issue of Sinn Fein allowances, that amendments may be tabled and selected and that the debate will not be truncated by other business?

Peter Hain: As I have already announced, there is other business in the House on that day. The situation will be rather dependent on what comes back from the Lords. If there is any ping-pong on the Bill, we shall have to see. There is plenty of opportunity for debate on this important item, so I can give the hon. Gentleman that assurance.
	I apologise to the hon. Member for North Cornwall (Mr. Tyler). One of the issues that I did not address was his point about the House of Lords report by a number of eminent Members of this place. It is an impressive report and we shall consider it seriously.

Mohammad Sarwar: Can my right hon. Friend ensure that we make progress on the Equality Bill which bans religious discrimination in the provision of goods and services, putting discrimination against Muslims on the same footing as racial discrimination? Can we have an early debate on this subject so that we can learn whether the Opposition would let the Bill through in the event of an early Dissolution?

Peter Hain: My hon. Friend makes an important point. As he knows, the Equality Bill will be given its First Reading today. That legislation is a clear signal of the Government's intention to ensure that Muslims throughout Britain can enjoy protection from religious discrimination and, through the Serious Organised Crime and Police Bill, can enjoy protection from incitement to religious hatred. That has been a protection that Muslims have not enjoyed up to now, almost exclusively, compared with other faiths and groups in our society.
	I hope that the Liberal Democrats and the Conservatives will do a U-turn on their policy of opposition, according to which they are not defending Muslim communities, and should be, whereas this Labour Government are standing shoulder to shoulder with Muslim communities and providing extra support and protection.

John Bercow: Given that Dr. Than Nyein, U Saw Naing Naing and U Soe Han, three long-standing democratic political opponents of Burma's military dictatorship, have been incarcerated in appalling conditions, having been denied fair trials and medical treatment alike, would the Leader of the House agree that it would now be proper for the Foreign Secretary to make a statement about the treatment of those individuals? Would he not further acknowledge that it would be the most fitting imaginable tribute to that truly great man, Peter Benenson, the founder of Amnesty International, who died last week, if, following the making of a statement, the Government were to make the strongest possible representations within the United Nations about the bestial behaviour of this rogue state?

Peter Hain: I am grateful to the hon. Gentleman for giving me the opportunity, and I am sure the whole House, to put on record our acknowledgement that Peter Benenson, in founding Amnesty, lit a torch for freedom that has continued to burn brightly and has held every Government in the world, including our own, accountable for any potential human rights abuses.
	As for Burma, I agree with the hon. Gentleman that it is an odious junta. The sooner that it can be brought down and replaced by a democratic, civilised Government, the better for the Burmese people. The treatment of the three individuals to whom the hon. Gentleman refers is completely intolerable, but unfortunately in line with the junta's behaviour. As well their treatment, we are aware of the long-standing oppression of Aung San Suu Kyi, who should in my opinion, subject to the views of the Burmese people, be the true leader of Burma.

Julie Morgan: May I add my regret about the loss of the international women's day debate? Is my right hon. Friend aware that on Tuesday, which was 1 March, St. David's day, representatives of the British Medical Association in Wales presented a petition containing thousands of signatures to my right hon. Friend the Prime Minister at No. 10 Downing street, plus a bunch of daffodils, in support of a ban on smoking in enclosed public spaces in Wales, and in support of my private Member's Bill on 18 March? Does my right hon. Friend agree that one of the best gifts that Wales could have on St. David's day would be smoke-free air in public spaces, especially in view of the report this week that stated that 30 people die every day from passive smoking? What efforts will the Government make to ensure that this happens?

Peter Hain: I applaud my hon. Friend for bringing forward her Bill to seek to restrict smoking in public places. It will encourage the policy that the Government have announced, and which my right hon. Friend the Secretary of State for Health has promoted through the public health White Paper, of ensuring that passive smoking does not lead to the injury, ill health and death that it currently causes, and that smoking is restricted in public places. We are not able to support my hon. Friend's Bill for various reasons, but in terms of the thrust of the policy that it contains she will find that we are with her in spirit. She will also be encouraged by subsequent legislation that we intend to introduce, which will give Wales the opportunity to implement policies in the way in which the National Assembly choose.

Roy Beggs: Will the Leader of the House arrange a debate as soon as possible to enable the House to end the perceived discrimination by Government against parents in Northern Ireland who wish to have their children educated in grammar schools, by enabling those parents to exercise the same rights as parents enjoy in England, who by local referendum can choose to retain their local grammar school, and also by enabling the House to prevent discrimination against the state sectormainly Protestant children in our schoolsin the form of proposals recently, which the Government admit will reduce funding to the state sector by 3 per pupil annually and increase funding to maintained sector childrenwho are mainly Roman Catholicby 5 per pupil annually? Surely the Leader of the House and the House would uphold the need for abandoning and preventing discrimination at all levels.

Peter Hain: Of course no Labour Governmentcertainly not this onewould want to see discrimination anywhere in Northern Ireland or, for that matter, on the British mainland. I acknowledgeI ask that the hon. Gentleman does so as wellthat notwithstanding the points that he has made, which have been noted by my right hon. Friend the Secretary of State for Northern Ireland, there is now record investment in schools in Northern Ireland and that education standards are rising. I am glad that the hon. Gentleman acknowledges that with a nod to me. The children of Northern Ireland and their parentsindeed, the whole communityare now much better off than they were under the dreadful policies of the last Conservative Government.

Patrick Hall: When my right hon. Friend visited Bedford recently, he saw the bust of Archbishop Trevor Huddleston, who was born in Bedford and later lived and worked in South Africa. He went on to found the anti-apartheid movement. On Monday 21 March, I will join constituents at the Trevor Huddleston sculpture to help to publicise the campaign to make poverty historya cause of which Trevor Huddleston would certainly have approved. Will my right hon. Friend try to find time for the House to debate the aims of Make Poverty History and the crucial role that the Government are playing in it?

Peter Hain: I would certainly like to find an opportunity to debate Make Poverty History. I am absolutely certain that, as my hon. Friend said, Archbishop Trevor Huddleston would have backed it enthusiastically. He was an inspirational figure in the freedom struggle throughout the world, particularly in South Africa, where he played a crucial role. Make Poverty History is also supported by Nelson Mandela, who has exerted major pressure on the G7 leaders, and the Chancellor and Prime Minister have played a leading role in that global campaign.

Sydney Chapman: Will the Leader of the House confirm that the Government have no intention of proceeding any further with the European Union Bill, which had its Second Reading nearly a month ago? Will he also confirm whether the Government intend to have the Identity Cards Bill, currently being debated in the other place, placed on the statute book in the next five weeks?

Peter Hain: It is our intention to have the Identity Cards Bill on the statute book as soon as we can. That will depend on the Opposition's response. It remains to be seen whether the Conservatives will back this commonsense measure, which is widely supported by about 80 per cent. of the population. That applies to the Liberal Democrats as well. Will they seek to block the Bill? It will be an interesting challenge for the Opposition, and members of the public will be watching very closely to see who is on their side in the fight against terrorism and illegal immigration and in favour of improving the security of legitimate British citizens.
	On the European Union Bill, we want to proceed as soon as an opportunity arises. We want to get it through and we will proceed when we can.

Andrew MacKinlay: Can we have a debate on the monarchy? Under the smokescreen of a general election, Prince Charles is altering the constitution a la carte. The fact is that he is entitled to marry whomever he likes, but the custodians of the constitution are here in the House, and this matter raises questions about morganatic marriage. Stanley Baldwin said that the constitution made no provision for such marriage, so perhaps we should legislate to change that. If not, Camilla may become Queen. Questions are also raised about the male primogeniture rule, which is currently discriminatory, and the religious faith of the monarch. Those issues cannot be handled by stealth. There should be a conscious discussion in this place about all these matters. It is wrong for Prince Charles to be able to alter the constitution by this gradualist approach without consulting Parliament. These are matters for which the House has a responsibility, and whether our politics are left, right or centre we should not abdicate that responsibility.

Peter Hain: I have to disappoint my hon. Friend, because I cannot promise him a debate. In fact, I have absolutely no intention of having a debate on this subject. As he knows, the Secretary of State for Constitutional Affairs made a statement in which he explained the Government's position on these matters. As to the accusation of proceeding by stealth, we need to acknowledge that this wedding, which will take place on 8 April, has a public profile. It is anything but stealth; it is in the full glare of publicity. I am sure that my hon. Friend would want to join me in wishing Prince Charles and Camilla Parker Bowles a successful wedding and a happy marriage.

Eric Forth: Did the Leader of the House notice in yesterday's PMPs

Julian Lewis: PMPs?

Eric Forth: Prime Minister's porkies.
	Did the Leader of the House notice that the Prime Minister said how delighted he would be if we spent the next few months arguing about the national health service? Did the Leader of the House take that as a hint, or even a definitive statement, from the Prime Minister that there is no general election in the offing and that we will still be here debating these important matters? Does the right hon. Gentleman have the Prime Minister's confidence, or does he read into the Prime Minister's words, as I do, that we can all go off for our Easter break in a relaxed mood?

Peter Hain: I would not want the right hon. Gentleman to go off in a relaxed mood at any time, though I have considerable affection for him as a parliamentary performer and, actually, not a bad bloke, despite his dodgy views on the European Unionand just about everything else, for that matter.
	Since the right hon. Gentleman asks about health, it gives me the opportunity[Interruption.] No, I cannot help him on the general election. I am always delighted to debate health, as it gives me an opportunity to point out that under this Government the number of elective admissions for operations has increased by 750,000. The proportion of cancelled operations has remained roughly the same, but the fact that the actual number of operations is so many hundreds of thousands higher means that we are doing much better with the NHS than the Tories did in the past or could do now.

Stephen McCabe: Will my right hon. Friend consider having an early debate on matters associated with the shocking case of the convicted paedophile, Rupert Massey, which is highlighted in the Daily Mirror today? As I understand it, he has been awarded 5,500 by judges in Strasbourg because of the stress that he claims he suffered due to delays in his trial. Surely this is human rights gone mad. Should we not be thinking of finding ways to claw back that money and repay it to the Criminal Injuries Compensation Authority, which has already had to compensate Massey's victims for the stress they suffered on account of his evil deeds?

Peter Hain: I find it absolutely extraordinary that a convicted paedophile could have secured compensation for stress when the stress caused to his victims was incomparably greater. I find it incredible, and I am sure that many people on both sides of the House and throughout the country will simply not understand it.

Adam Price: The annual Welsh day debate was meant to have been held on St. David's day this week, but was sadly postponed. Will the Leader of the House provide us either with the date on which it will be held or, if Wales is no longer a priority for him, will he at least offer my party its Opposition day debate before the next election?

Peter Hain: I reassure the hon. Gentleman that Wales remains an absolute priority for me, as he well knows. I am looking for an opportunity to have a Welsh day debate and I acknowledge the considerable disappointmentand perhaps, in some quarters, angerthat would follow if we did not have such a debate. I am actively looking for an opportunity, as I regret the fact that the passage of the terrorism and emergency provisions legislation that we have had to introduce made it necessary to postpone the Welsh day debate.

Paul Flynn: Ten years ago, only a quarter of first-time home buyers were required to pay stamp duty, but now it is three quarters. When can we have a debate on the raise the roof campaign, which is being conducted by the West Bromwich building society and the company Mortgage Watchdog and is supported by an early-day motion signed by members of all parties? The aim is to raise the tax threshold from 60,000 to 150,000, thereby giving real help to home buyers of modest means.

Peter Hain: I understand my hon. Friend's point, but he has to explain how the shortfall in revenue would be met if we were to continue to fund the excellent public provisionin education, health and so many other respectsfor which the Government have been responsible. I know that my hon. Friend enthusiastically backs such provision. Tax matters are for the Chancellor, not for me.

John Hayes: The Leader of the House knows that, under your watchful gaze, Mr. Speaker, he is a guardian of the traditions and civilities of this House. Will he therefore make a statement about the growing practice of Members tabling questions solely for the purpose of electoral gain? [Hon. Members: No!] Shocking though it is, that is happening. Members are seeking to gain information solely in order to use it against their political opponents in their constituencies. The worst practice is tabling questions about other Members' constituencies, as happened in respect of the Leader of the Opposition, the shadow Chancellor, the shadow Home Secretary and others. That is a breach of the civilities and courtesies of the House. If the Leader of the House does not make a statement, no doubt you, Mr. Speaker, will have to intervene to maintain those courtesies, and I hope that he will make a statement before you have to act.

Peter Hain: Of course it is my duty, and it is especially your duty, Mr. Speaker, to maintain the courtesies and civilities of the House. There must be cross-party understanding that we all need to respect those civilities, and I do not think that the hon. Gentleman's accusation is fair because of the one-sided way in which he made it. We could look at all sorts of pre-election fever in the House and various behaviours and accusations that are an inevitable product of that.

Wayne David: Earlier this week it was announced that air tankers' wings are to be built at the Airbus facility in north-east Wales. Yesterday it was announced that the Atlas Consortium is to have the third bidder status for a major IT contract, which will help south-east Wales. Does my right hon. Friend agree that this week has been an excellent one for Wales and Welsh jobs?

Peter Hain: It has been a fantastic week for Wales and Welsh jobs. If there is an opportunity for a Welsh day debate, we will be able to put on the record that north and south Wales are benefiting from the best investment in high technology areas. Wales is on a roll nowon the rugby field, in business, in manufacturing and right across the board. Wales is leading in a world-class drive to make sure that we are in a strong competitive position, and my hon. Friend's point is a good example of our success.

Bob Spink: May we have a debate before the House rises for Easter to establish that although inclusion is good for some children, moderate and severe learning difficulty schools are essential for many of our special needs children, and we should follow no policy that puts them at risk of closure? In such a debate we can thank and pay tribute to all the staff and teachers who work in those schools, which do a wonderful job.

Peter Hain: I endorse what the hon. Gentleman says. Teachers do one of the most important jobs in the worldmore important, I hesitate to say, than that of politicians. For the very reason that he gives, I hope that he will support the Government's policy of recruiting. Since we came to power, we have recruited 29,000 new teachers and 100,000 classroom assistants, with numbers continuing to rise. Many of them are in special needs teaching, which is one of the most difficult jobs in the profession.

Clive Betts: Will my right hon. Friend reflect on the speculation about the possibility of an early Dissolution and, in particular, provide information on the likely progress of the Gambling Bill? In my constituency two casino developers, MGM and Sun International, have expressed interest in developing regional casinos which would be at the heart of major regeneration plans for the old industrial areas of the Lower Don valley. Can he reassure us that the Gambling Bill will not be lost? That would significantly delay that major regeneration, which has widespread public support in my constituency.

Peter Hain: As my hon. Friend knows, the Bill has completed all its Commons stages and has already had its Second Reading in the Lords. We hope that it will pass through as soon as possible. It is an important Bill, not least for the reasons that he gives. Equally importantsome might think more importantis the fact that it will clamp down on all sorts of abuses of gambling, particularly internet gambling, in which children and some of the most vulnerable are exposed and put at risk. We want to stop that.

Andrew MacKay: Does the Leader of the House accept the urgent need for a ministerial statement on the European Union decision to lift the China arms embargo, not least because it will put great strain on our special relationship with the United States of America? There is a real possibility of a large number of jobs being lost in this country as a consequence.

Peter Hain: I do not accept that there is a possibility of a large number of jobs being lost. [Interruption.] Well, there have been discussions with the Americans on a number of issues, including this one, and there is now greater understanding, particularly as a result of the recent visit by President Bush to Brussels when this matter was discussed, of the American position and concerns and, equally, of the European position. The right hon. Gentleman will, I am sure, applaud the fact that it was this Government who brought in a strict code on the export of arms so that it cannot be undertaken from Britain or indeed, as a result of our initiatives, from anywhere in the European Union if the arms are to be used for aggressive purposes externally or oppression internally. We abide by that code, and any arms exports will be made in accordance with it.

Jim Sheridan: May I draw my right hon. Friend's attention to a circular sent to every member of staff of the Alliance and Leicester building society under the heading, Money-laundering and Politically Exposed Persons? Clearly identified as a politically exposed person is a member of this House or their close relatives. Staff are advised:
	If any member of staff identifies a PEP when opening a new account or administrating an existing account, they must notify the Money Laundering team.
	Will my right hon. Friend use his good offices to have the position clarified with the Fees Office, so that Members know exactly what is going on when they are treated as financial terrorists by organisations such as Alliance and Leicester?

Peter Hain: My hon. Friend has performed a valuable service in drawing that problem to the attention of the House. The relevant Minister will want to pay close attention to what he said. If my hon. Friend has an opportunity to apply for a debate to raise the matter, I am sure that he will.

Martin Smyth: The Leader of the House paid tribute to teachers. Does he recognise the growing concern among teachers about the possibility of extending their retirement age from 60 to 65 and the penalties that will be imposed, bearing it in mind that many of them live under strain? May I impress on him the need for a debate in the House on foreign issues, bearing it in mind that Nathan Scharansky has played such an important role to date partly because some of us in this House fought for the release of Soviet refuseniks?

Peter Hain: Indeed, and those who fought for the release of Soviet refuseniks under the repressive communist regime deserve to be applauded and acknowledged. I will make sure that the relevant Minister is aware of the hon. Gentleman's earlier points.

John Smith: As this week saw the start of the DVT awareness month in the USA and more than 32,000 people in this country die unnecessarily from deep vein thrombosismore than the numbers of those who die from breast cancer, AIDS and road traffic accidents put togetherwill my right hon. Friend find time for this House to explore ways of supporting a similar initiative in this country? Next Tuesday the Health Committee will report that far fewer people die of the condition in the USA than here and something needs to be done.

Peter Hain: Certainly the Secretary of State for Health will want to pay close attention to my hon. Friend's comments. Notwithstanding that, my hon. Friend will acknowledge that in many other respects we are making considerable progress in cancer treatment and so on as a result of our huge investment, much of which would be at risk under the Opposition's policies.

Colin Breed: Will the Leader of the House make time for a debate on the serious issue of our defence industries, particularly our naval dockyards which, because of Government policy, are suffering from a paucity of refit work? That will have a huge effect on the continuation of skills which are vital for the future.

Peter Hain: There is a reconfiguration of defence spending in line with modern military realities, but the defence budget continues to rise in real terms and will continue to do so. The hon. Gentleman will recognise that, because of new threats and new operational necessities on the groundfor example, in Iraq and other theatres of conflictwe have to tailor our defence forces to meet those realities. I do not accept that there is any shortage of skills provision as a result of this investment. The investment will continue to rise and would be put at risk by the Opposition policy of cutting public spending.

David Chaytor: May we have a debate about the future of the neighbourhood renewal fund? As my right hon. Friend knows, the Government are consulting on four options for the distribution of those important regeneration funds. Does he agree that it is critical when making the judgment that the Government use the most recent information provided by the new index of multiple deprivation? Does he accept that that is crucial for local authorities that stand to gain from the new index of multiple deprivation, because access to the neighbourhood renewal fund triggers access to a wide range of other Government funding streams and funding from the regional development agencies? Can my right hon. Friend find time for a debate on that important subject?

Peter Hain: I shall certainly consider that, but I am not optimistic that I can find time in the next few weeks, at least.
	I remind my hon. Friend that, notwithstanding his important points, which will be borne in mind by the Deputy Prime Minister, the Government have invested nearly 1.9 billion in the 88 most deprived areas of the country in the period 200106, with a further 1 billion a few years after that. All that would be at risk under the Conservative party's plans for 35 billion of public spending cuts.

Crispin Blunt: Once the Leader of the House has put right the shocking deficit of debate on the Prevention of Terrorism Bill in the Chamber, which his proposals in the business statement do not adequately address, can time be found to address deficits in NHS funding? We could then understand why the East Surrey primary care trust has had to instruct the Surrey and Sussex Healthcare NHS trust not to carry out any elective surgery unless patients are about to breach the nine-month target. Will the right hon. Gentleman also explain why the Mid Yorkshire Hospitals NHS trust, which serves the constituency of the Chairman of the Health Committee, received a 30 million bung to sort out its deficit when, in Surrey and Sussex, the blame is falling entirely on the managers, who, as I said back in 2001, have to manage an impossible situation?

Peter Hain: It is not unusual for the health service to be reporting deficits at this stage of the financial year. Past experience shows that the overall position improves by the year end, and the health service has achieved an overall financial balance for the last four successive financial years. The real deficits, as the hon. Gentleman knows, happened before we came to power in 1997, since when the health budget has doubled with record investment, all of which would be at risk under the Conservatives' plans for 35 billion of cuts. He supports the plans for 1 billion to be taken out of the health service and put into private hospitals.
	The hon. Gentleman referred to a shortage of time to discuss the legislation on terrorism. As I said, 17 hours are available next week, but we do not know whether that will need to be extended because we do not know what will come back from the House of Lords. I will pay attention to hon. Members' requests.

Huw Irranca-Davies: As we look around the desperately tired and flagging faces in the Chamber today, how concerned is my right hon. Friend about the startling report that MPs are getting less sleep than any other profession in the UK? Given that Churchill, who is generally well regarded and was an effective leader of the country, slept famously long hours, but other Prime Ministers and Leaders of the Opposition had very different nocturnal habits, how worried should we be?

Peter Hain: Given my restricted sleeping hours and the pressures of my job, I am not sure that I am a good advertisement. Perhaps the public expect their Members of Parliament to work hard for them, and we do. I think the public may prefer politicians who have something of the day about them.

Nigel Evans: I thank the Leader of the House and the Government for the success of the Welsh rugby team. I am sure that they could not have achieved it without them. Diolch yn fawr.
	Cyber-theft is silently stealing millions of pounds from our constituents. One wrote to me last week to say that a bill that was usually between 25 and 30 is now more than 170. Will the right hon. Gentleman arrange for a Minister to come to the Dispatch Box to spell out the strategy to deal with the rising problem of preventing and protecting our constituents from being bled dry?

Peter Hain: The Cabinet is split on the excellent performance of the Welsh rugby team. It is united on everything else, but there are serious divisions concerning the performance of the Welsh rugby team versus the Scots, Irish and English rugby teams. I cannot offer the hon. Gentleman any support or claim any credit.
	The hon. Gentleman's point about cyber-theft is important, and it was valuable to have it drawn to our attention. The relevant Minister will want to pay close attention to it and may be in touch with the hon. Gentleman.

Mark Tami: Can we have an early debate on engaging younger people in the political process? During the next few weeks, two school groups from Elfed high school in Buckley and Connahs Quay high school will visit the House. The Welsh Assembly provides financial assistance for the transport of schoolchildren to visit the Assembly from outside a radius of 25 miles. We provide none. Why?

Peter Hain: That is a matter for the National Assembly. I am sure that the First Minister will want to take note of my hon. Friend's point.
	My hon. Friend will know that the School Transport Bill is before the House and I hope that all Opposition parties will support it in the event of an early dissolution because it will make the problem of school transport easier to solve.

Alistair Carmichael: Can I take the Leader of the House back to his comments on the Prevention of Terrorism Bill and his remarkable assertion that the time allowed so far in this place has been adequate because the Bill has only 11 clauses? I remind him that on Monday at the conclusion of the debate, during which at least as much time was taken for contributions from Labour Members as from Opposition Members, the House had not even concluded consideration of clause 1. With 10 of the 11 clauses and the schedule unconsidered, how can he say that we have had sufficient opportunity to consider the Bill? As the Government got the timetabling so disastrously wrong on Monday, what is the bare minimum of time that they will provide for consideration of Lords amendments?

Peter Hain: Well, until I know what Lords amendments there are, it is not possible to benchmark them against the time available, but I shall bear in mind any representations on the necessity for proper scrutiny. However, at least 17 hours will be available and we will continue to monitor the situation. I am anxious to have proper scrutiny of the Bill and to make available extensive time consistent with the need to get the Bill through before 14 March. Otherwise, we will be unable to deal with the problem of suicide bombing and other forms of terrorism threatening the country. That is the issue that divides us. Of course there is need for proper scrutiny and I shall continue to ensure that the House's views are protected.

Ian Lucas: May we have an early debate on the renewable energy manufacturing industry? When Sharp Electronics (UK) set up photovoltaic cell manufacturing in Wrexham last year, it did so on the basis of a long-term commitment to renewable energy manufacturing. A disturbing story in The Independent today suggests that there is grave concern in the industry about uncertainty for future funding of the scheme, which is due to run out in April next year. I know that my right hon. Friend is interested in the matter, so will he have a word with the Department of Trade and Industry to try to get it to present the new scheme soon to ensure that we have continuous support for this important developing industry?

Peter Hain: I agree that this is an important developing industry. I visited Sharp with my hon. Friend and continue to take an interest in it. It is a flag-carrier for photovoltaic panels and renewable energy. As he knows, 31 million has so far been awarded to solar panel projects, and current funding extends to March 2006.
	What we need to do following the renewables innovation review is to consider its proposal for a technology-blind capital grant programme combining household renewables and energy efficiency technologies to see whether there is a more efficient way of delivering that support. Support for solar PV is an important part of the programme and we are clear that there will be continued funding. The report in this morning's newspaper did not take account of the fact that the Government are committed to prioritising funding for solar PV, even if the way in which it is delivered is configured to take account of the need for insulation and energy efficiency measures as well.

Julian Lewis: Last week the Leader of the House, typically generously, responded warmly to my suggestion that we might have a debate on performance-related pay for politiciansthat is, cuts in what they get paid when they do not do their job properly. On that occasion, I had in mind his right hon. Friend the Chancellor of the Duchy of Lancaster, but today I have in mind the Liberal Democrats. Given that they have been pontificating about the anti-terrorism legislation up and down the country, does the Leader of the House agree that whichever view one takes on that legislation, for the Government to have saved it by 14 votes, and for 17 Liberal Democrats, including their leader, not even to have turned up to voteone third of their parliamentary strengthis absolutely disgraceful?

Peter Hain: The fact that 24 Conservative Members were absent as well means that I will just let them fight it out between them.

Kevin Brennan: Could we have a debate on causes of crime? Is my right hon. Friend aware that the Liberal Democrat-led council in Cardiff, despite receiving an increase in its funding of 5.6 per cent. this year at a time of low inflation, is cutting back on youth service provision? That includes the Ely youth bus, in an area in my constituency with high rates of crime and antisocial behaviour. Together with proposals to lower the drinking age to 16 and to give the vote to prisoners, does not it show that the Liberal Democrats are not only soft on crime and soft on the causes of crime, but soft in the head?

Peter Hain: I enthusiastically agree with my hon. Friend on all those points. I think it goes to show that when the Lib Dems are in power we really see how appalling and incompetent they are. What they are doing in Cardiffa city that has been the fastest-growing European capital, under a dynamic Labour leadership, for many yearsis putting its future in question by these appalling policies. The sooner we get a Labour majority in Cardiff, able to provide the visionary leadership that Cardiff once enjoyed, the better.

Bill Wiggin: The Prime Minister assured me that the right hon. Gentleman would speak to the Secretary of State for Defence about the naming of Welsh regiments. May we have a debate about the importance of keeping at least one regular battalion in Wales? Finally, on St. David's day the right hon. Gentleman assured the hon. Member for East Carmarthen and Dinefwr (Adam Price) that we would have a debate, but when he answered the hon. Member for Caerphilly (Mr. David) he introduced the word if. St. David's day debateyes or no?

Peter Hain: I am anxious to get a St. David's day debate just as soon as I can. I give the hon. Gentleman that assurance, but it will not be tomorrow or in the next two weeks because I have announced the business for the next two weeks.
	On the question of the naming of the Welsh regiment and the Welsh battalions, as the hon. Gentleman knows, the Army Board has recently made a decision on this matter. Despite extensive representations from him, from me and from Members right across the House, it has made its own decision and that, I am afraid, is that. It is not a matter for Ministers any more; it is a matter for the Army, because that is the source of the decision and the announcement that has been made.

Andrew Turner: Pursuant to the right hon. Gentleman's answer to my hon. Friend the Member for New Forest, East (Dr. Lewis), the Liberal Democrat leader said this morning that it had been a judgment call to miss the vote and
	I followed the debate right through.
	Well, we now know that his judgment was very poor, but in the Daily Telegraph yesterday we read that the Liberal Democrats said that
	Mr Kennedy and many others were away campaigning.
	In fact, the vote was at 9.56 pm and the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) was boarding a taxi in Abingdon street only half an hour earlier. May we have a debate entitled, Helping the Lib Dems to co-ordinate their words with their actions?

Peter Hain: That is an excellent idea. Perhaps the hon. Gentleman would get his Front-Bench spokesmen to apply to me for an Opposition day debate. Perhaps, in that debate, we would learn the Conservatives' policy for dealing with the problem of terrorism, following the Law Lords' decision, the expiry of the renewal order and the situation that would follow on 14 March. Despite all the twistings and turnings by the Conservatives and by the Lib Dems on this matter, nobody knows what they will do if terrorists walk away without the necessary control orders and continue to organise in the way that they have been doing, and without proper security and protection for our communities and tough Government action against international terrorism. The country now knows that it is the Government taking tough action against international terrorism, while the Lib Dems and the Conservatives are wavering and do not know what they would do.

Points of Order

Oliver Heald: On a point of order, Madam Deputy Speaker. In circumstances where the main Opposition party has made it clear that it is prepared to extend the existing terrorist legislation and have offered the alternative of a short period of legislation in order to protect the position, is it in order for the Leader of the House so grossly to misrepresent the position of the Conservative party, when it is his party that is reckless and prepared to go ahead without proper respect for the House?

Madam Deputy Speaker: The matters to which the hon. Gentleman has referred will be debated in the near future.

Mark Tami: On a point of order, Madam Deputy Speaker. During business questions I asked the Leader of the House about the funding of school trips to this Parliament. I think he misunderstood me and I wonder whether it would be possible for me to have a written answer on that subject or, obviously, a reply now.

Madam Deputy Speaker: That is not really a point of order for the Chair, but the Leader of the House is here; he will reply.

Peter Hain: Further to that point of order, Madam Deputy Speaker. I am sorry that in the general hubbub from the other side of the House I misheard what my hon. Friend the Member for Alyn and Deeside (Mr. Tami) said. I will certainly send him a reply on the matter.

Orders of the Day
	  
	Consumer Credit Bill

As amended in the Committee, considered.

New Clause 1
	  
	Disapplication of section 101 of the 1974 Act

'(1)   In section 101 of the 1974 Act (right of hirer to terminate regulated consumer hire agreement) after subsection (8) insert
	(8A)   If it appears to the OFT that it would be in the interests of hirers to do so, it may by general notice direct that, subject to such conditions (if any) as it may specify, this section shall not apply to a consumer hire agreement if the agreement falls within a specified description; and this Act shall have effect accordingly.
	(2)   In subsection (8) of that section for the words from this section onwards substitute , subject to such conditions (if any) as it may specify, this section shall not apply to consumer hire agreements made by the applicant; and this Act shall have effect accordingly.'.[Mr. Sutcliffe.]
	Brought up, and read the First time.

Gerry Sutcliffe: I beg to move, That the clause be read a Second time.
	Under section 101 of the Consumer Credit Act 1974, regulated consumer hire agreements are cancellable after 18 months. Section 101(8) allows for the Office of Fair Trading to direct that regulated hire agreements from an individual applicant can be non-cancellable for a period of longer than 18 months, where it is in the hirer's interest. This amendment enables the OFT to direct that a whole class of hire agreements can be non-cancellable for a period of longer than 18 months, although the agreement must meet specified criteria.
	This new power is necessary as the OFT has been receiving large numbers of very similar applications for directions. The need for individual directions can lead to significant delay with few benefits to those concerned. A particular example is that of the home computing initiative, which encourages employers to set up schemes to provide access to home computers for their employees. However, to make this economical for employers, hire agreements must be non-cancellable for more than 18 months. The increasing popularity of the scheme means that the OFT is receiving a high number of individual applications, which is resulting in significant delays for applicants. This is a barrier to the success of the home computing initiative.

Graham Allen: Would my hon. Friend, in respect of this new clause and many others in the Bill, express his view on the timing of the legislation and its progress in the other place? Is it not important that the Bill gets to the other place quickly and that the other place takes it seriously, given that so many constituency interests are involved for Members in all parts of the House, particularly on those provisions relating to retrospectivity in respect of the loan shark parts of the Bill? Will he take the opportunity, when it is in order, to make the appropriate comment, because many of us are very concerned about this matter?

Madam Deputy Speaker: Order. I think those are points for Third Reading.

Gerry Sutcliffe: I am grateful to my hon. Friend the Member for Nottingham, North (Mr. Allen) for making those points and I am sure that I shall return to them at the appropriate time when it is in order.
	To return to the point about the home computing initiative, which is a key plank of the Government's policy of increasing access to the internet in UK homes, this amendment would enable the OFT to grant group directions in this and other cases where it would be in the interests of hirers to do so. It is not necessary for the OFT to approve each application individually to provide adequate protection for hirersthat wastes time and resources; it can simply identify general criteria, which will ensure that agreements under the scheme are in the hirer's interest. The new clause will cause no reduction in consumer protection, but there is a real benefit associated with the costs and efficiency of the process.

Laurence Robertson: I want to deal with the new clause only briefly and in general terms. We made the point on Second Reading and, indeed, I made it at considerable length in CommitteeI think that the Minister anticipates what I shall saythat we are really concerned about increasing the power of the OFT. I should be ruled out of order if I repeated the arguments that I put forward on Second Reading and particularly those that I gave in Committee, but the extra powers that the OFT will get from the Bill are a matter of concern to a great many peoplein the industry and generallyand to hon. Members.

Nick Hawkins: rose

Michael Fabricant: rose

Laurence Robertson: I see my hon. Friends queuing up; I shall give way to my hon. Friend the Member for Surrey Heath (Mr. Hawkins).

Nick Hawkins: My hon. Friend is making an extremely important point. As he and the Minister are aware, I used to work as a corporate lawyer before I came to the House in 1992, and I spent part of my career in the consumer credit industry. Does my hon. Friend agree that one of the success stories of Britain in the latter part of the 20th century and the beginning of the 21st century has been the creation of a flexible and successful consumer credit industry? We do not want cowboys to be involved in it, but equally we want to make sure that we do not give power to over-mighty regulators. Does my hon. Friend agree that reputable organisations in the industry, such as the Finance and Leasing Association, have expressed concerns about giving too many unfettered powers to the OFT?

Laurence Robertson: My hon. Friend is right. We have a very flexible and successful industry. I was going to say that we support the principles of the Bill, but that we are concerned about aspects of itwhich we explored in Committee and can explore this afternoon. My hon. Friend has put his finger on one of those.
	The OFT is already a powerful organisation. It was not created by the Consumer Credit Act 1974, but it has been given an awful lot of powers. I bored hon. Members at length in Committee and on Second Reading

Gerry Sutcliffe: No, no.

Laurence Robertson: The Minister says that I did not.
	I discussed at great length in Committee my problems with another matter in which I have a constituency interestthe horse racing industry. As we approach the great week at Cheltenham, it is probably appropriate to remind the House that the way in which the OFT was looking at the horse racing industry was very clumsy.

Madam Deputy Speaker: Order. I ask hon. Members to confine their remarks to the new clause that is being debated.

Laurence Robertson: I apologise, Madam Deputy Speaker.
	I was going to say that the OFT threatened to wreck the industry with a heavy-handed approach and to make the point that there was little that the House could do about it. I am therefore concerned about giving the OFT more powers when we cannot affect its decisions. I shall attempt to explore that issue a little more deeply on a later amendment. However, although I shall certainly not recommend to my hon. Friends that we oppose the new clause, I want to put it on the record that we recognise the fears expressed by industry representatives that the OFT is becoming far too powerful. I regret that.

Michael Fabricant: My hon. Friend has made his point clearly, as did my hon. Friend the Member for Surrey Heath (Mr. Hawkins). Does he agree that the OFT has a valuable role in protecting the consumer and that Conservative Members would certainly not want to see largeor, come to that, smallorganisations working together as cartels, monopolies or oligopolies?

Madam Deputy Speaker: Order. Once again, we are going rather wide of the new clause. I ask hon. Members please to confine their remarks to the new clause.

Michael Fabricant: Does my hon. Friend agree that although we agree to the new clause and the Minister's interesting points, we do so not only with concern about the power of the OFT and our inability in the House to control all its actions, but with a view to our need to protect the consumer as well?

Laurence Robertson: My hon. Friend is right, and the objective of legislation of this kind is balance. That involves being fair to consumersconsumer protection is of paramount importancebut not throwing the baby out with the bath water by being too prescriptive. We shall come to that issue in a few minutes, I suspect, on other amendments. I am concerned about the extra powers being given to the OFT, especially when the House cannot affect what it does. When constituents complain to us about matters that we cannot raise with the people who make the decisions, that is regrettable.

Malcolm Bruce: I want to say briefly that I am happy to accept the Government's new clause. Although I have expressed reservations about the OFT, the new clause will give it the power to do the job that it does not do often enough: to adjudicate on whether or not trade is fair. My concern is that the OFT does not do enough to promote fair trade and that it regards itself more as a competition agency.
	The promotion of fair trade is a proper role. Indeed, I have tabled other new clauses and amendments that would impose further responsibilities on the OFT. However, in deference to the Conservative spokesmanI share some reservations with the hon. Member for Tewkesbury (Mr. Robertson)my view is that it is not the accretion of power to the OFT, but the imbalance in the way that the OFT applies its powers and its accountability that are matters for concern. For that reason, the thrust of the new clause is to make the OFT do more of what it should do and perhaps to spend less time on what it should not do.

Gerry Sutcliffe: The hon. Member for Tewkesbury (Mr. Robertson) was consistent during the debates in Committee in his views about the OFT.

Andrew Love: And about Cheltenham.

Gerry Sutcliffe: And about the timing of Cheltenham week, as my hon. Friend suggests.
	I want to reassure the House that the new clause does not involve a serious giving up of power that will thwart consumer protection in any way. The idea of a class agreement will help the consumer. That is the basis for moving the new clause. For example, about 300 applications have been made for individual exemptionswhich can take up to eight weeks, to the detriment of the consumer. There are other examples of class agreements, and the process could be applied to the bicycle-to-work campaign. NotwithstandingI am sure that this will be a consistent theme this afternoonthe OFT's role, this important step will be beneficial to the consumer. The reason why we did not take it earlier is that we were looking around to ensure that anything that helps the consumer would be included in the Bill. The new clause is entirely sensible.
	Question put and agreed to.
	Clause read a Second time, and added to the Bill.

New Clause 2
	  
	Maximum levels of interest and other charges

'(1)   The Office of Fair Trading shall publish, at least annually, the range of interest rates and ancillary charges currently on the market for specified products.
	(2)   The Office of Fair Trading shall, within 14 days of publishing the information provided for under subsection (1)
	(a)   publish court rulings and details of cases brought before the ombudsman concerning levels of interest rates and ancillary charges for agreements deemed unfair under section 19, and
	(b)   present to the Secretary of State a report on the conclusions it has come to and the recommendations it has decided to make as a result of its consideration of these findings.
	(3)   Where, on receipt of the report from the Office of Fair Trading, the Secretary of State considers that the cost of credit for any particular product, or within any sector of the consumer credit market, taken together with any charges made for ancillary services usually sold together with regulated agreements, are causing widespread consumer detriment, he may by order introduce regulations requiring the Office of Fair Trading to set out maximum permitted levels of interest and other charges for particular products or in particular sectors of the consumer credit market.
	(4)   Regulations as provided for under subsection (3) may not be laid unless the Secretary of State has first published a notice of intention to do so, and not less than 52 weeks have elapsed since the publication of such notice.
	(5)   During the period of the notice, the Office of Fair Trading shall
	(a)   consult with industry and consumer bodies concerning the possible effects of the introduction of a maximum permitted level of interest, and
	(b)   make a report to the Secretary of State concerning the consultation responses and the conclusions it has come to and the recommendations it has decided to make concerning the issues raised by the responses.
	(6)   Where a creditor charges a rate of interest or makes a charge that is in excess of any permitted maximum imposed under subsection (3), then the agreement will be unlawful and unenforceable against the debtor and the creditor shall be liable for a civil penalty.
	(7)   Regulations introduced under subsection (3) may provide for maximum levels of interest and other charges to be
	(a)   reviewed at such times as the Secretary of State thinks fit, and
	(b)   revised in line with changes to the Bank of England Base Lending Rate or as considered appropriate and recommended by the Office of Fair Trading following the consultation provided for in subsection (5).'.[Adam Price.]
	Brought up, and read the First time.

Adam Price: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following: New clause 4Standard method for the calculation of interest accrued
	'(1)   The Office of Fair Trading shall consult financial agencies and produce a standard method for the calculation of interest accrued to enable direct comparison between products.'.
	New clause 5Further duties of the Office of Fair Trading
	'(1)   The Office of Fair Trading (OFT) shall periodically, and at least annually, publish the range of interest rates and ancillary charges on the market for specified products.
	(2)   The OFT shall publish court rulings and details of cases brought before the ombudsman on levels of interest rates and ancillary charges for agreements deemed unfair under section 19 and report on these findings to the Secretary of State.'.

Adam Price: Last year, I introduced a ten-minute Bill on creating an interest rate cap. I am grateful to the House for the opportunity to raise this very important issue again, as it is of great interest to many people. I speak in particular about the umbrella organisation, debt on our doorstep, which has campaigned long and hard on the subject of an interest rate cap. Oxfam, Help the Aged, the Local Government Association and Church Action on Poverty are involved in that campaign. I also pay tribute to the Sunday Mirror, which has recently launched a campaign called curb the credit sharks to promote the idea of interest rate ceilings.
	Essentially, new clause 2 would introduce a requirement on the OFT to collate accurate information on interest rates in the different segments of the consumer credit market and, separately, on any relevant court judgments. It would then provide the Secretary of State with an enabling power to introduce an interest rate ceiling subject to a one-year notice period, in order to allow sufficient time for consultation in the industry.
	We have already had the opportunity to discuss this matter. On Second Reading, the Minister gave an assurance that the subject of interest rate capping would be kept under reviewthe door, if not wholly open, is slightly ajar. He said that he stood by the decision not to introduce a ceiling, but that he was committed to keeping the matter under review. I would be interested to hear today a little more about the Government's intention; how do they intend to keep the matter under review? I will make my decision on whether to force the new clause to a Division on that basis. The hon. Member for Rhondda (Chris Bryant) is listening intently to me for once; I thought that he wanted to intervene.
	The debt on our doorstep campaign has asked the Government whether it can have more information on how they propose to review the matter. The emphasis in the Bill is on the new unfairness test, which is very welcome but will depend to some degree on interpretation in the courts. The new clause is intended to provide a further guarantee by requiring accurate information and allowing for the enabling power if the unfairness test does not create the desired security.

Gerry Sutcliffe: The hon. Gentleman hits on the crucial point of why we are not going for an interest rate ceiling and why I see the unfair credit test as the appropriate route. Unfortunately, because of the order of selection, the debate on unfair credit will come later. However, the hon. Gentleman will hear in response that I believe that the unfair credit test may be the appropriate way to head.

Adam Price: I hope that the Minister is right, but we will know only once the legislation goes through the courts. We do not want to get into problems of sub judice, but I think that the recent case is now subject to appeal under previous legislation. I suppose that the intention of legislators of the Consumer Credit Act 1974 was to provide some protection, but unfortunately that was not delivered.

Chris Bryant: I do not know whether the hon. Gentleman has had the opportunity to read our proceedings in Committee, but we quizzed the Minister and pushed him quite hard to try to ensure that the unfairness test would catch many of the self-evidently unfair practices about which all Members are concerned. My worry about the hon. Gentleman's new clauseI wholly agree with his aim, not least because many of my constituents have faced the terrible practices of loan sharks and of those who do not look like loan sharksis that we might be encouraging interest rates to creep up to the cap rather than bearing down on them.

Adam Price: The argument that the cap would become the market average was one of the points made in the research that the Government commissioned, and I will come to the Policis report shortly. I hope that the Government are right and that the unfairness test will be sufficient. The new clause would provide an additional safeguard and give the Secretary of State some flexibility; it would assess accurately through the collation of information whether the test is having the desired effect. I believe that the Liberal Democrats have tabled a new clause that includes a parallel provision. If it is felt that the unfairness test is not having the desired effect, another policy option would be available.

James Plaskitt: The hon. Gentleman talks of the new clause being a further safeguard, but will he comment on the choice of words in subsection (3), which proposes the test of widespread consumer detriment which would trigger the cap? Do not excessive interest rates, which give us all cause for concern, especially when imposed by loan sharks, often apply to small groups of individuals in a confined area? Would that not always fail his test of widespread detriment?

Adam Price: That would be subject to interpretation by the Secretary of State in the first instance. A fairly generous notice period is allowed for. It would be difficult for the industry to argue that a 52-week consultation did not give it ample opportunity to respond to any move by the Secretary of State. I hope that that covers the hon. Gentleman's point.
	I want to turn to some of the arguments about the collection of information.

Andrew Love: I have some sympathy for the argument that the hon. Gentleman is making, but let me express to him my concern. In a recent report, Affordable credit: The way forward, Elaine Kempson from Bristol university, who is considered the foremost independent analyst in the area, said in her conclusion:
	Many of the proposals to tackle high-cost lending while well-intentioned could accelerate the move away from lending to the poorest people and thus leave them with even less choice and higher costs.
	Does the hon. Gentleman think that his well-intentioned new clause might achieve that?

Adam Price: No, I do not think so. That is the Government's argument

Andrew Love: It is Elaine Kempson's argument.

Adam Price: The argument is that an interest rate ceiling could lead to more rather than less financial exclusion, particularly given that we do not have a well-developed financial infrastructure for people at the lower income end. The UK is almost unique in not having controls in this area, yet we have greater financial exclusion than that in countries where there are interest rate ceilings. Therefore, the empirical evidence suggests the opposite: the UK, which does not have an interest rate ceiling, has the greatest problem with financial exclusion.
	In France, the regulator has a remit to research and publish information on prices charged in the marketplace, as suggested in the new clause, and to set interest rate ceilings for different types of loans. In Italy, the Government take responsibility for setting a legal maximum interest rate, which is double the average rate charged. In Germany, there is also a maximum rate of double the average. In Switzerland, the legal limit is 15 per cent. There are similar arrangements in some of the Australian and American states. In the Netherlands, there has been an interest rate ceiling since before the second world war.

Gerry Sutcliffe: The hon. Gentleman is making some important points. He cites what happens in other countries, but I am sure that he will accept that the UK credit market is far more mature. Let us consider the levels of credit available across the range of products in the UK. That has tempered our view, and is why we would not learn from examples in other European countries. I understand his point, but I ask him to reflect on the nature of the UK credit market.

Adam Price: Part of the UK financial services sector is very good at getting profits out of some of the poorest people in our communities. I know that that is not what the Minister meant, but I would not regard that as a sign of maturity. There are elements that we need to develop further. The credit union movement in Ireland, for example, is far wider and deeper than it is in the UK. There are the Sparkassenpublicly owned lending institutionsin Germany. An interest rate ceiling, while necessary, would not of itself be sufficient. There have to be other, complementary measures. I think that the Government have recognised that, because in addition to the welcome new safeguards in the Bill, they have accepted the need for a positive agenda on building up, initially through pilot projects, new mechanisms to combat financial exclusion.
	My core point is that the evidence from countries in the European Union, north America and Australasia, some of which have had interest rate ceilings for many years, shows that they have less of a problem of financial exclusion. I therefore question the accuracy of the research on which the Government based their decision. Representations were made by debt on our doorstep and by Professor Udo Reifner, of the Institute for Financial Services in Hamburg. Professor Reifner was involved in the original work that led to the decision to create an interest rate ceiling in Germany. He wrote to the Department to express his concerns about the research. For example, according to him, there was no direct discussion with European consumer groups or with any of the key stakeholders that have a good overview in Germany.
	There is a statutory requirement in Germany to measure the interest rate ceiling's effects on financial inclusion and exclusion, but the UK Government-commissioned report made no reference to that and its conclusion was precisely the opposite of what the German Government's statutory data show, which is that after the introduction of the ceiling there was less financial exclusion than before. The debt on our doorstep campaign has made an application under the Freedom of Information Act 2000 to get some of the working papers underlying the Policis report, and I believe that the deadline for the Department to answer is today. Perhaps the Minister will tell us whether he will release the information.
	The Minister has been open and consistent. He says that this is an interesting and well-intentioned debate, which should continue, and that the Government are committed to keeping the matter under review. However, will he be more generous and say how they intend to keep it under review? Given the serious and well-founded concerns about the Government-commissioned research, will they commission further research, which might resolve some of the problems of the earlier research; allow a wider range of submissions; and perhaps take another look at the empirical experience elsewhere? I hope that we do not have to wait 30 years for another consumer credit Bill, but it would be useful, while the present proposals bed down, to carry out further research that redresses the flawed nature of the Policis report.

Michael Fabricant: I have considerable sympathy with many of the hon. Gentleman's points, but does he agree with me on two? First, greater clarity is needed in the definition of interest rates. New clause 2(1) refers to the Office of Fair Trading publishing,
	at least annually, the range of interest rates,
	but which interest rates? There are different ways of calculating annual percentage rates, so that interest rate X offered by one credit card company is not the same as interest rate X offered by another, because of the small print on the APR. [Hon. Members: New clause 4.] But new clause 4 was not tabled by the hon. Gentleman to whom I am addressing my question.
	If I may, Madam Deputy Speaker, I wish to raise a second point, which is that I am a little unsure about what the hon. Gentleman means by financial

Madam Deputy Speaker: Order. Interventions are to be brief.

Adam Price: I assume that the hon. Gentleman was about to ask me what I mean by financial inclusion and exclusion. The latter is the lack of equitable access to financial services, particularly among lower-income groups. Because of that key problem, such people are vulnerable to exploitation by the less worthy, less mainstream financial services companies, which prey on the poor.

Michael Fabricant: That is the definition that I thought the hon. Gentleman was using, but in that case I do not quite follow his argument. In Germany, there is a real problem of people living in the rust belts, which lie mainly in eastern Germany, being unable to borrow money from Sparkassen because they do not meet the criteria, and therefore suffering social exclusion. Far be it from me to take the Minister's side of the argument, but does not that show that sometimes people who desperately need to access money quickly can only borrow at excessive interest rates, because the lower interest rates offered by institutions such as Sparkassen are not available

Madam Deputy Speaker: Order. Again, the hon. Gentleman is making a speech, not an intervention.

Adam Price: I understand the hon. Gentleman's point, although I am not an expert on the recent experience of Sparkassen. Their creation following the second world war was an important contribution to social regeneration in West Germany, but there may be problems.
	We are discussing the type of exorbitant interest rates charged on, for example, pay-day loans, whereby people get loans covering a few days in advance of pay day on which the APR charged can be about 1,000 per cent. My question is whether the unfairness test, which will ultimately rely on the courts, will be sufficient to tackle such problems. The new clause is designed to provide an additional safeguarda policy lever that has been used successfully in other European countries and throughout most of the industrialised world.

David Drew: I think that the clause is a good one and I hope that the Government will give it serious consideration. However, if I have a criticism of the hon. Gentleman, it is that he is being rather too sanguine about the orthodox end of the market. We all know what the Treasury Committee has been discovering about the lack of transparency surrounding credit cards. The whole industry is opaque; it is no wonder that operators at the other end of the market try to get away with charging excessive interest rates.

Adam Price: The hon. Gentleman has a point. The debt on our doorstep campaign has recently brought cases against Alliance  Leicester and some other mainstream providers. Examination of charges and default payments, for example, reveals points on which such providers can be criticised. The interest rate ceilings set in some European countries would affect some store cards, whose APR can be as high as 35 per cent. I suspect that if the enabling power that I propose was given to the Secretary of State, the initial focus would be on the door-to-door lending market, where there is an urgent need for scrutiny, but I agree that some of the mainstream providers have used the flexibility afforded them by current legislation.
	I am interested in seeing whether the Minister will go a little further and acknowledge some of the difficulties with the original Policis report, about which there are genuine and widely held concerns. I want further research to be done, because that would go a long way toward meeting some of the demands of the campaigning organisations.

Chris Bryant: I am grateful to the hon. Member for East Carmarthen and Dinefwr (Adam Price) for tabling the new clause, because the subject was not expressly debated in Committee and there is considerable concern about it in my constituency. Some lenders, credit card companies and personal loan providers deliberately target areas with large pockets of poverty. People in those areas want ready access to finance for short or long periods, but they cannot use the services provided by more orthodox lenders, and must rely on those who will lend only at high rates of interest. Such lenders operate in particular in areas where a large proportion of the population own their own homes, so they know that they can turn an unsecured loan into a secured loan, and have some certainty about whether they can get the money back from poor communities. The Government are right to address the issue, as we need to tackle financial exclusion and the profound cynicism in some parts of the financial services market.

David Drew: I agree entirely that the worst aspect of this is the targeting not just of individuals but of whole areas so that resources are sucked out. However, does my hon. Friend accept that the problem is the way in which the financial regime blacklists certain areas, as that means that the other lenders know exactly where people are desperate to get money? That is discriminatory, and deserves careful examination.

Chris Bryant: My hon. Friend is right. The system that provides City money for companies engaged in such marketing in those communities should be inspected. Some of the standards of honesty that those companies use when they are trying to raise money in the City fall short of what we in the House aspire to.
	I am wholly sympathetic to the reasoning behind the new clause tabled by the hon. Member for East Carmarthen and Dinefwr. Indeed, I am attracted to the notion of a maximum interest rate, which prima facie is a good idea, and is in the interests of the poorest communities in the land. A couple of arguments have been evinced against a maximum interest rate, but I did not find them convincing. My hon. Friend the Minister argued that we have a mature financial services and consumer credit industry, which is true to some extent, as it has been around for a long time and is highly competitive. However, I would argue that as a result there is an intense scrabble for customers, and the better business practices to which we all want the financial services industry to aspire sometimes fall by the wayside. Occasionally, the maturity of the market is counter-productive.

Gerry Sutcliffe: The Bill aspires to achieve responsible lending and borrowing as well as transparency. We need to make sure that where the industry does not behave properly, suitable regulatory powers are available to the Office of Fair Trading. We also want to make sure that consumers are fully aware of the detail of the relevant agreements. That is the basis of my belief that we have a mature market.

Chris Bryant: I agree with the Minister. Individuals should be aware of the requirements of the deal that they are entering into and comprehend them fully. Even if lenders include an official statement about the risk of people losing their home if they do not keep up their interest payments, many consumers are desperate for money and are under pressure, especially in the run-up to Christmas and the holiday period, so they find it difficult to understand the deal that they have entered into. The old principle of caveat emptorbuyer bewareis important, but this is an area in which the market alone will not provide.

Michael Fabricant: The hon. Gentleman has made an important point. Is it not the case that in a sophisticated and mature financial market the respectable side of the market recognises that it is not a good investment to make loans to some people? Consequently, the portion of the population highlighted by the hon. Member for East Carmarthen and Dinefwr (Adam Price) can be exploited. He gave the example of an APR of 1,000 per cent. or more, and such interest rates can be levied because the mature and sophistimicated market does not sell its products to those people, who cannot access it.

Chris Bryant: I think that the sophistimicated market is a Bushismbut I am sure that everyone in the Chamber agrees that exploitation needs to be tackled. We want to try to find the right means to prevent exploitation, whether of individuals or of communities, including the Rhondda, which I represent.
	I do not accept the argument that a maximum interest rate would make it impossible for poor people to gain access to financial services. Some loans should not be made, because people cannot afford them. I accept that most financial services organisations want to ensure that they do not lend money to people who cannot afford a loan, because they might not get the money back. However, if that results in unsecured loans being turned into loans secured on people's homes, we should put a stop to that corrupt exploitation.
	I find some aspects of new clause 2 problematic. The new concept of widespread consumer detriment proposed by the hon. Member for East Carmarthen and Dinefwr may well undermine the provisions at the heart of the Bill to tackle unfair relationships. Courts may decide to strike down an agreement that someone has entered into for all sorts of reasons, but they cannot do so because the interest rate is too high, as there is provision to tackle that elsewhere in the Bill. That is detrimental to the cause of preventing exploitation, so I hope that the Minister will give some further explanation. He is waggling his head as he did in Committeebut perhaps he will do it later. High or excessive interest rates and the charges that often ensue for late payment are exploitative in themselves, and should be considered by the court as reasons for characterising an agreement entered into by a consumer as an unfair relationship and striking it down. If that is the case, we should not support the new clause, as it would contradict the purposes that we are trying to achieve.
	I fear that if the Government used the powers afforded by the new clause and set a maximum interest rate, that rate might be considered acceptable and could lead to a steady sliding up of interest rates. I hope, however, that the Bill will achieve a steady sliding down of interest rates. Once a court strikes down an agreement because the interest rate is excessive and the relationship is unfair, I am sure that there will be a dramatic change in higher interest rates. My contribution has not been as short as I intended, which is often the case. I wholeheartedly support the aims of new clauses 2 and 4, but I am not sure that they would help us to achieve the aims that we are trying to achieve.

Malcolm Bruce: I am glad that the hon. Member for Rhondda (Chris Bryant) acknowledged the role of new clauses 4 and 5, to which I wish mainly to speak. I have had discussions with debt on our doorstep, and the early part of new clause 2 is derived from my original amendment, which I have separated out, partly for the reasons stated. I do not think that we disagree on what we are trying to achieve; we are trying to work out a way to deliver a practical result. As the hon. Gentleman says, we want lower interest rates, and we want people to be able to take advantage of the best available interest rate, rather than the worst, which is often the case at the moment.
	We have gained some useful insight and information from the Sunday Mirror campaign, in conjunction with debt on our doorstep, which is to be commended, even if we cannot agree precisely with the three objectives. It seeks a cap on interest rates, and there may be a way of achieving that slightly different from the one in new clause 2; new clauses 4 and 5 might lead to that outcome or to an even better outcome. It also seeks to stop reckless lending, which I shall deal with when we debate amendment No. 21, and it seeks to improve educationa matter not specifically addressed here, but my new clauses are designed to give people more information, so that they can make informed decisions and be aware.
	One of the main problems that people have is knowing what rate of interest they are paying, and what that means. I hope that new clause 4 will commend itself, at least in principle, to the Government and to the Office of Fair Trading. It would be hugely helpful if we had a mechanism to ensure the comparability of rates of interest and to establish the method by which interest is collected, and perhaps also if we required customers to be given a clear statement of the interest and how it would be incurred.
	The Consumers Association has sent us a briefing with an example of two credit cards from different organisations, ostensibly offering different rates of interest, but charging exactly the same, because of the different way in which the interest is applied in terms of time and repayment terms. Even an intelligent and well-informed customer is in an impossible position when trying to calculate the real cost, so we need to inform, and the Office of Fair Trading should be helping that process. I commend new clause 4 as a means of suggesting how that might be done.
	New clause 5 addresses the issue of excessive interest rates, and suggests a way in which we might achieve the results sought by the hon. Member for East Carmarthen and Dinefwr (Adam Price). The range of products and the way in which interest is charged are differential, so we need some mechanism that can be applied by product. We need to establish a standard way of calculating interest. We may also require a standard way to present interest, and to state product by product the range of interest rates in the market, in real terms, rather than through what the card provider wishes to say. For example, we need to be able to say, The real rate of interest operating in the market for normal credit cardsapart from special offers of 0 per cent.is between 8 per cent. and 28 per cent., and the median is about 16 per cent. By implication, therefore, anything outside that borders on the excessive.

James Plaskitt: As the hon. Gentleman will know from our time in Committee, I am entirely in sympathy with what he seeks to achieve here, but does he accept that new clauses 4 and 5 focus on the calculation of interest, and even were we to achieve a common method of calculation throughout the industrya common arithmetical standard for defining and calculating APRthat would solve only a small part of the total problem, because the issue is the cost of credit, not just the APR? Does he recall the evidence showing that even where cards have the same APR, based on the same method of calculation, the actual cost of credit can still vary by as much as 40 per cent.?

Malcolm Bruce: Of course I do. As is always the case, when as individual Members we table amendments to Bills, we try to focus on a point to help the Government, as the principal legislator, and the agencies that will operate the Bill to understand the will of Parliament and to devise methods to apply it. These new clauses have been tabled in that spirit. Some positive wind from the Government behind them would be helpful as a directive to the OFT, the ombudsman and others as to how they might go about applying the legislation.
	During the Bill's passage to date, we have all said that we do not know how it will work in practice, and we will not know until is has been up and running for a while, but it is not unhelpful for the House to give some kind of steer as to our expectations. Matters such as charges, times at which interest rates are calculated and the point from which they date all need to be taken into account, but comparability is a point, because if people are presented with two identical rates of interest that cost something completely different, or they have no idea how to make comparisons, that might be why they do not switch from high-cost cards to low-cost cards. They will not be aware that it would make a differenceand it may not make a difference if the methods of calculation are different.

David Drew: Does the hon. Gentleman agree that the state has the opportunity to be even more proactive? The hon. Member for East Carmarthen and Dinefwr (Adam Price) mentioned the role of credit unions. They could operate through every post office branch, and the Department for Work and Pensionsa major funder of the mechanism by which money reaches individuals through the financial systemcould be encouraging the relationship to grow so that people could pay their money into credit unions and use them as a mechanism for borrowing, which would tremendously expand that movement, but also set a benchmark for the lower rates of interest that could be obtainable.

Malcolm Bruce: That is an eminently good suggestion, and I hope that the Post Office management and the DWP will take it up between them. Cash handling is what the Post Office is best at, and credit unions, which I strongly supportI have them in my constituencyare an important vehicle. The more they expand, the more they will fill some of the gaps. Even so, there are conditions attached to credit unions that leave some people outside, and that is why some people get into debt and difficulties. Later I will allude to the fact that for many people the biggest single problem is the accumulation of debt rather than the rate of interest.
	New clause 5 shares the same objective as new clause 2, but seeks to achieve it in a rather different way. Basically, the OFT should do an analysis, and periodically publish bands of interest rates, so that people will be aware that if they are paying above that rate, they are at the wrong end of the market and should be able to find something lower. That is desirable. Secondlya much more powerful weapon, particularly when the Bill is enacted and its provisions are up and runningwe should identify interest rates that are outside those parameters and likely to be deemed to be falling on the wrong side of the unfairness test, effectively giving a strong warning to the industry and a clear guide to the customers that if a case is taken to the ombudsman or to court the consumer would probably win it and the credit provider would probably lose it. The publication of such information is likely to pull the interest rates back into the tramlines, simply because people will not want that.
	I have tried to think through a mechanism that avoids some of the disadvantages of setting a maximum rateone is that the maximum can become a minimum, which is the concern of the hon. Member for Rhonddaand some circumstances in which it might not be appropriate. The hon. Gentleman made a fair point. In many ways some rates of interest and some loans should never be provided, but although I will not say that that attitude is patronising, there is a difficulty in deciding where that level falls. There are people who openly, consciously and knowing exactly what they are doing, will sometimes accept high rates of interest for short terms because of a cash gap. That often includes poor people who have cash bumps, although sometimes quite well-off people are willing to do it, and ironically the Bill has allowed well-off people to do what the heck they please. We are obviously more concerned about the poorer people.

Adam Price: That is not an argument against the idea of a maximum rate; that is an argument against setting that maximum at too low a level. Clearly, one has to take account of the conditions in the marketplace and provide sufficient flexibility, but it is not an argument against the principle of a maximum rate.

Malcolm Bruce: I think that it is, and that is a point of difference. I might mention the fact that I have grave reservations about the Financial Services Authority, the establishment of which I supported and was somewhat involved in. Far from protecting consumers, it is often used as cover for saying that things are all right. I take the point that the Sunday Mirror and the debt on our doorstep campaign have raised, which is that the maximum charge on plastic should be no more than 25 per cent. more than the base rateso currently 30 per cent.and that the maximum for doorstep lending should be 80 per cent.
	The problem with that is that doorstep lending might be running at 40 per cent. or 50 per cent., which would make it much easier for people to say, Well, 80 per cent. is okay. That is a genuine concern. We are not disagreeing about the outcome, but we are offering a different way of achieving the same result. Our proposal is more dynamic and flexible, and would mean that the OFT could give notice as the market developed and say what it regarded as excessive, at a given time and for a particular product.

Alistair Burt: I am following the hon. Gentleman's argument carefully. I, too, share the concern about the difficulty of setting the rate, for all the reasons that have been discussed. The danger, given that so many things have to be taken into account, would be that the level would be set so high that it would be practically meaningless. Does the hon. Gentleman have any proposals for parliamentary scrutiny of the rate, so that there would be a mechanism other than just the Office of Fair Trading, perhaps influenced by the Government? That way, someone else could have some input into whether the rate chosen had any bearing on real life outside.

Malcolm Bruce: I must confess that my proposals do not address that, although the issue is related to a comment that I made in an intervention on the hon. Member for Tewkesbury (Mr. Robertson). I have reservations about the OFT. We need to ask, Quis custodiet ipsos custodes? Who ensures that the OFT is trading or operating fairly? I take the point that the hon. Member for North-East Bedfordshire (Alistair Burt) made and I think that mechanisms are necessary. For instance, the Treasury Committee has done a good job and there may be other mechanisms. All I have done with my new clauses is try to give direction to the OFT, so that it does its job more effectively than it has in the past.
	My point, which I hope I have explained clearly, is that I agree that there ought to be a recognition of what are excessive and extortionate interest rates at any given time, and that the unfairness test can be applied to them. However, the only point of disagreement is on quoting a particular rate in the Bill, which denies flexibility and judgment over time, given the development of the market and different products.

Chris Bryant: The honest truth is that the vast majority of people in the country would think it unfair that poor people have to pay higher interest rates than rich people, which is one of the great injustices of life. The hon. Gentleman referred to doorstep lending, but perhaps he would care to be a bit more careful about that concept. In theory, of course, the law does not allow it, although we all know that it happens, especially in certain areas, not least in my constituency. My worry is that if the maximum interest rate were set too low, more people would be pushed into doorstep selling, which, because it is illegal and outside regulation, is a greater danger.

Malcolm Bruce: I completely agree, and I have made that point on a number of occasions. I should, however, point out that doorstep lending was not my term but the Sunday Mirror's term. I would prefer to talk about doorstep collection, which is an established and reputable aspect of the credit market. It is true, in every sense of fairness, that
	For whosoever hath, to him shall be given . . . but whosoever hath not, from him shall be taken away
	although to an ex-cleric, I do not need to quote that. Nevertheless, that is the case, and it is even true of the tax system, which falls, proportionately, more heavily on those on lower incomes than it does on those on higher incomes.
	We are trying to achieve a degree of justice. However, as I think the hon. Gentleman said in his speech, the legitimate justification for higher interest rates is sometimes that institutions are offering short-term unsecured finance to people of dubious means, and are therefore likely to suffer substantial defaults, so they build that into the calculation. As long as both parties understand that, there can be a fair and agreed bargain. There is a danger, as has rightly been said, that those arrangements could be excluded, which would drive people to the criminal underworld, where drug barons and the like try to recycle the money from their drugs and other things. That would be completely the opposite of what the Bill is trying to achieve, and not what any of us wishes to happen.
	I hope that I have explained the logic of my new clauses. I do not claim that they are perfect and I have no intention of forcing them to a vote, but I believe that they are a constructive contribution to the debate. I hope that the Government will make positive noises in response to themor better still, take them away and improve on them. However, the Government should certainly give guidance to the OFT along similar lines, as we are looking to it, with some trepidation, to operate the provisions in a way that applies not only the letter of the law, but the spirit of the debate on the Bill.

Laurence Robertson: This has been an interesting debate and it reflects well on the House that we can have such a well informed debate, even when we hold different opinions.
	It is important that we discuss the issue, because even if we do not agree with what is proposed, the debate sends a message to the industry that it needs to deal with people fairly and compassionately. We all know that those who can least afford the higher interest rates are those most likely to have to pay them, which is a good reason to discuss the issue.
	Another good reason is that personal debt in increasing. Only this morning in The Times business section, there was a report on HBOS, which has announced that the value of its unsecured loans where borrowers are three months or more in arrears last year rose by more than 20 per cent., from 1.4 billion to 1.7 billion. That is a tremendous amount of money. HBOS figures also referred to borrowers with secured loans totalling 952 million being three months or more in arrears, which was an increase of 100 per cent. in the past year. So debt and arrears are increasing. The reason for that is not necessarily the rate of interest that those people pay, but the point is relevant to this debate.
	Although the Bill is well intentioned and contains much that is good, there is a feeling that it lacks the teeth to address the issues that concern us. Although we accept that, as I am sure the Minister will say, such matters are covered by the unfairness test, which we support, we are concerned that we do not yet know what unfair means in that context. However, I shall return to that issue on a later amendment. There is a need for clarity on how we will address the problem of indebtedness, particularly among those who can least afford it.
	There are nevertheless a number of reasons, some of which have already been raised, why I cannot agree that having the Minister set the maximum level of interest rates is the way forward. One of the most important points, which has been mentioned, is that the rate of interest is not the only thing that matters. There are of course difficulties with agreeing on what that maximum rate should be. Indeed, as the hon. Member for Rhondda (Chris Bryant) said, if a maximum rate were set, lenders might be inclined to increase their standard rates to nearer the maximum than otherwise.
	The point, however, is that the interest rate is not the only thing that matters. The charges that often go with loans are what count. The ability, legal or not, of lenders to write letters when people have missed payments and charge them 25, 40 or whatever for the privilege of doing so is unfair. That adds to the cost of the loan. The interest rate is only one part, although it is of course an important part.
	We must also take into account companies that collect money on the doorstepthe hon. Member for Gordon (Malcolm Bruce) referred to that, rather than companies that lend on the doorstepwhich can often provide a more flexible approach. Although the interest rates of those companies might be higher than what is found through the ordinary way of borrowing money, they may offer a more flexible service. They know their customers and can sometimes tell them that if they cannot pay one week, they can pay twice the next week. I accept that that can lead to problems, but the difficulty is not crucial when we are talking about amounts of only 5 a week, for example. To take away the flexibility to benefit customers simply because the interest rate charged is higher than normal would be to miss the real problem.
	My main reason for opposing setting maximum rates of interest is that I do not consider that to be the Government's job. We must strike a balance between protecting consumers and making it impossible for people to get a loan or credit, even if they have to pay a bit more money. I believe in the free market. I accept that we have to regulate sometimes, but we must not over-regulate and allow the Government to interfere in every aspect of people's lives. The British people have a good deal of common sense, and we must allow them to borrow money at the rates that they deem acceptable.
	Questions have been raised about the transparency of interest rates, and to some extent that problem has been addressed by a statutory instrument. Much remains to be done in that regard, however, and I accept that we must protect vulnerable people, as lack of choice means that they are more likely to borrow at higher rates of interest than the rest of us.
	That said, we must leave the determination of interest rates charged on credit transactions to those who want to borrow and those who want to lend. I recognise that this matter needed to be debated, and those who tabled the new clauses have done so very competently. However, for the reasons that I have given, I cannot recommend to Conservative Members that they should support the new clause.

Gerry Sutcliffe: I begin by adding my congratulations to those hon. Members who have contributed to the debate, which has been of a very high quality. Quite rightly, we have moved beyond the content of the new clauses to discuss other matters connected with the Bill, as consumer credit has not been looked at for more than 30 years. All sides of the argument generally accept that something needs to be done, given the maturity and development of the market.
	The hon. Member for Tewkesbury (Mr. Robertson) said that he believed in free markets, but the Government believe in fair and competitive markets. We believe that fairness is a vital component in this matter.
	The new clauses in this group all relate to interest rates. New clause 2 deals with interest rate ceilings, new clause 4 with interest rate calculations, and new clause 5 with the monitoring of interest rates. I shall deal with each proposal in turn, as they cover different aspects of the same theme.
	I am grateful to the hon. Member for East Carmarthen and Dinefwr (Adam Price), who said that he was committed to introducing a maximum rate of interest and who introduced a private Member's Bill on the subject last May. We may disagree on that, but I know that he wants to protect vulnerable people, and he will accept that that has been the spirit of this debate. All hon. Members are aware of the effect on our constituents of unfair credit and the difficulties that people can get themselves into.
	I slightly disagree with the hon. Member for Tewkesbury about debt levels and the proportion of disposable income spent on debt, but I do not want to go into that, as we are all working to the same goal. The Treasury Select Committee, the Treasury, the National Association of Citizens Advice Bureaux and various consumer groups, as well as the industry itself, have all done a great deal of work on financial inclusion. I also want to go on record with my thanks to debt on our doorstep. Although we disagree, its campaign has been important and I have met representatives from that organisation on several occasions. My right hon. Friend the Member for Leeds, West (Mr. Battle) has also been heavily involved in campaigns about debt.
	I am grateful for the work done by the Sunday Mirror and many other newspapers with sections devoted to financial advice. The campaign to ensure responsible lending and borrowing has been important, and provides the context for my response to these new clauses.
	I do not believe that imposing an interest rate ceiling is the right option at this time. As has been noted, such a ceiling could harm the very consumers whom we are trying to protect. The hon. Member for East Carmarthen and Dinefwr talked about the research carried out by the Government, which debt on the doorstep does not regard as perfect. However, the Policis research is very important, and I shall say more about that later. It shows that interest rate ceilings can lead to low-income consumers using products that are not suitable for their needs. Such products also make it difficult for consumers to control their levels of borrowing. For example, as the hon. Member for Tewkesbury said, they may include late-payment charges that are not part of the advertised interest rate.
	One of the proposals in this group of new clauses is that there should be a cap on high charges, but those charges do not need to be unreasonably high to cause problems for low-income consumers. Those are the people most likely to miss payments, and thus most likely to be charged. Even a charge that does no more than recover costs can be a problem if it is frequently incurred.
	The hon. Member for East Carmarthen and Dinefwr mentioned the research carried out by Policis, which found that interest rate ceilings exclude low-income consumers from the market. That prevents them from getting into debt, but the research shows that demand for credit among that group remained constant, whether or not a ceiling was in place.
	The hon. Member for East Carmarthen and Dinefwr raised a number of other matters to do with the Policis research, and I shall respond to them now. He said that debt on the doorstep had sought information under the freedom of information legislation. The inquiry was highly detailed, and I can confirm that the DTI has responded and that some documents have been sent off today.
	Other questions included the calculation of APRs. New regulations on credit advertising come into force on 31 May, introducing a single set of assumptions required for the calculation of those rates. As for the consultation with Professor Reifner, his research showed that low-income consumers in Germany did not have the same access to credit as their UK counterparts. That backs up the point that I made that ours is a mature and highly developed market.
	The DTI also looked at the situation in the Republic of Ireland, where the interest rate cap has been set at 200 per cent. People in Ireland take out fewer small and short-term loans, and the limited competition there has had an adverse effect on low-income consumers. The hon. Member for East Carmarthen and Dinefwr spoke about independent evidence in respect of the time scale for this matter. I shall return to that later, because I am committed to keeping an interest rate ceiling under review, even though we do not intend to introduce it today. In that context, all available information and research will be very helpful.
	The questions covered in the new clauses have been discussed by various consumer bodies. We have taken note of the observations from NACAB and the National Consumer Council, both of which oppose the introduction of interest rate ceilings. We do not want consumers to turn to illegal money lending, and we believe that that risk would increase if such ceilings were introduced.

James Plaskitt: Does my hon. Friend agree that although interest rate caps would provide some marginal help with the indebtedness problems about which all hon. Members are concerned, they would still do nothing about the fundamental causes of those problems? Those causes deserve greater focus. For example, one difficulty is the ease of multiple acquisition of cards. Each card could carry a cap, but in the absence of proper data sharing in the industry, that would not prevent some people from getting into very serious debt problems through owning several cards.

Gerry Sutcliffe: My hon. Friend is exactly right, and I pay tribute to his work in the Treasury Select Committee and elsewhere. He has done a great deal to highlight these problems, and he makes a fair point when he says that people could have several cards. In Standing Committee, we looked at data sharing and the problems that exist in that regard. The industry must be careful about hiding behind the data protection legislation too often as a way of avoiding sharing data.
	The hon. Member for East Carmarthen and Dinefwr does not want to introduce an interest rate ceiling now, but proposes the introduction of a reserve power to permit that to be done at a later date. He will not be surprised to learn that I do not accept his new clause. Our policy is not to introduce an interest rate ceiling, so there is no reason to include the reserve power in the Bill. The hon. Member for Tewkesbury would have some difficulty with the idea of Ministers having such a reserve power, as he has pointed out.

Chris Bryant: I am sure that the Minister, like everybody else in the Chamber, wants some of the truly exorbitant rates of interest to disappear from the market. Does he think that a court might feel able to declare that a credit agreement constituted an unfair relationship, merely by virtue of its exorbitant interest rate?

Gerry Sutcliffe: My hon. Friend looks quizzically at me once again, but I do not want to be drawn on that issue, which we discussed in Committee. Many members of the Committee tried to draw me down the path of defining clearly what the unfairness test is about. As I tried to explain, it is inappropriate for me to do so, although other members of the Committee were able graphically to explain their thoughts on the unfair credit test. We need to keep the test general because we want it to be flexible enough to catch all unfairness. By defining unfairness, one actually limits the test. No particular practice will always be unfair; it will depend on the circumstances. The tendency is for unscrupulous lenders to innovate, and we want to deal with all such unfairness.
	If we define the provision too closely, the courts might feel restricted in their ability to deal with any developments that take place. The unfairness concept exists throughout the financial services sector, so it is not appropriate to suggest that the provision is ambiguous and does not do what it was intended to do. I will leave the matter to the courts and hope that they will operate in such a way as to maximise fairness. I hope that that helps the hon. Member for East Carmarthen and Dinefwr.
	We will keep open the option of an interest rate ceiling in case emerging evidence from the courts and the financial services ombudsman shows that the legislation is not working, but we do not feel it appropriate to include such a provision in the Bill this time round. We are not talking about waiting another 30 years to deal with this issue, which will be with us for some time. The hon. Member for East Carmarthen and Dinefwr will know that through measures such as the financial inclusion fund, we are trying to educate and advise people on the appropriate use of credit, but also to persuade them to consider savings and credit unions. I hope that the financial inclusion fund will be used to develop and support the credit union movement in the way outlined by Members.
	Given the spirit in which the hon. Member for East Carmarthen and Dinefwr moved new clause 2, I ask him to accept my assurance that the door is not shut to such a measure, even though we are not going to include it in the Bill. I am happy to examine independent evidence to see how things are working, and to consider evidence from bodies such as debt on our doorstep on interest rate ceilings. I hope that, on that basis, the hon. Gentleman will withdraw the new clause.
	I turn to new clause 4. The case for a standardised way of calculating and applying interest to loan accounts was set out by the Treasury Select Committee in its December 2003 report on the transparency of credit card charges. The Committee argued that, particularly in respect of running account credit such as credit cards, a single set of assumptions for calculating the annual percentage rate did not go far enough in informing consumers about the cost of a product. It was still open to lenders to calculate and apply interest to accounts in many different ways, which meant that, as the National Consumer Council pointed out, products with the same APR could have different costs if used differently.
	The Select Committee urged the Government to work with the credit industry towards greater standardisation. In our formal response of February 2004, we argued that the key to consumer empowerment was ensuring that before borrowers commit themselves, they are given clear information on how the interest rate charges will be calculated under the agreement. To that end, we introduced legislation last summer. The Consumer Credit(Disclosure of Information) Regulations 2004, and   the Consumer Credit (Agreements) (Amendment) Regulations 2004, require both pre-contract information and credit agreements to include an explanation of how and when interest charges are calculated and applied under the contract.

Michael Fabricant: I accept the point that the Minister makes, but does he not accept that such explanations can often be quite confusing, particularly to those who are not financially literate? At the end of the day, they look at the headline figure and if it says 11 per cent. APR, that is what they see. They do not read an explanation in 8-point typeface that goes on in great detail for several paragraphs.

Gerry Sutcliffe: The hon. Gentleman will be aware that as a result of the consumer credit regulations that flowed from the White Paper, the summary box on such an agreement has now to be printed in a typeface that people can read. He is right, but this is where the test of unfairness comes into play. Under the Consumer Credit Act 1974, there was an extortionate credit test that was a very high hurdle for people to clear. The unfairness credit test reduces the height of that hurdle and will hopefully get the industry to act more responsibly, while at the same time making consumers more aware of what they need to do.
	Returning to new clause 4, the regulations that address the issue raised by the hon. Member for Gordon (Malcolm Bruce) come into force on 31 May. Removing this important information on the cost of credit from its location in the small print will help consumers to select the product that best suits their needs. We do not believe that standardising the way in which the interest is calculated and applied would benefit consumers, because doing so would eliminate consumer choice. Not all borrowers want to use credit in the same way, and they benefit from being able to choose a product that complements the way in which they organise their finances. For example, some credit card users will want a lower APR but will be prepared to pay interest from the date of purchase. Others will prefer a slightly higher APR but, if they do not settle the whole balance, will want to pay interest on the outstanding amount only. Provided that these aspects of the product are clearly highlightedour new transparency provisions will require thatwe believe that it is better to give consumers a choice of products. Standardisation may bring certainty, but it comes at the expense of flexibility and innovation and, ultimately, competitiveness and consumer choice.
	I understand the spirit in which the hon. Member for Gordon moved his new clause, and it will doubtless be reflected in the Bill's implementation and in the regulations to be introduced on 31 May. That said, I do not consider his new clause to be the appropriate way forward.

Laurence Robertson: The Minister mentionsas did Icompetitiveness and the free market. In a competitive world, the free market will put a downward pressure on interest rates because companies obviously want to sell their products. Is there any wayI cannot think of onein which we can examine the effect on the vulnerable, who are more likely to be paying higher interest rates? This is a difficult problem, but I ask the Government to give serious thought when they issue their guidelines to how such people might be protected. I do not agree with imposing a ceiling on interest rates, but I do accept that such people have a problem.

Gerry Sutcliffe: This brings us back to the question of fair markets, fair products, people fully understanding the product and their ability to get out of unfair agreements during the lifetime of such an agreement, rather than simply at the start. I should point out that if such an agreement is proved to be unfair, they can get out of it. These measures, together with the loan shark pilots in Birmingham and Glasgow and other work being done on financial inclusion, will hopefully enable people to choose the best product for them, regardless of their income and circumstances. That is what we are trying to achieve.
	Members in all parts of the House want to see responsible lending and responsible borrowing. One of the Bill's strengths is perhaps the lack of a party political element. There is a clear view that something needs to be done, and hopefully, this Bill, which has been preceded by two years of consultation and a White Paper, is the best vehicle to do it. With that in mind, I respectfully ask the hon. Member for Gordon to withdraw new clause 4, just as I will ask him to do in respect of new clause 5.
	On new clause 5, our view is that monitoring interest rates and charges would be a very costly exercise for the OFT and would subsequently impose excessive burdens on business. It would require the OFT to duplicate the valuable work already done in that area by consumer groups and researchers. The OFT's time and resources are much better spent on tackling fitness in the market, which is where it can most effectively ensure consumer protection, rather than collecting data and monitoring.
	It would not be useful for the OFT to publish the details of court cases or Financial Ombudsman Service determinations. Court judgments and evidence given in court in cases relating to unfair relationships tests will already be available to the public. The FOS will publish generic information from its cases, and it will share details of cases with the OFT to enable the OFT to take action, if it is necessary. The OFT will be able to publish key decisions relating to unfairness in its guidance, and I take the points on the development of guidance.
	A far better way in which to protect vulnerable consumers is to enact the Bill in its current format. The Bill will improve protection against unfair relationships and opportunities for consumer redress, and it will give the OFT the right tools to ensure that rogues are driven from the market. On that basis, I ask the hon. Member for East Carmarthen and Dinefwr to withdraw his new clause.

Adam Price: I thank the Minister for his response. We are calling for transparency in the industry, and the way in which he has taken the Bill through the Commons has been open, transparent and fair.
	I shall respond briefly to some of the points that have been made in this interesting debate. The hon. Member for Rhondda (Chris Bryant) and others have asked whether the maximum rate would effectively become the going rate, which is the one argument that the Policis report, of which I have been very critical, knocked down. The report states that although many within the UK industry have made that case, no evidence exists to support it from the countries in which a maximum rate has been set.
	Another argument is that a cap could cause some lenders to move out of the market altogether, leaving a gap in the marketplace, which might force some people into the arms of illegitimate lendersand to be fair, that argument holds some truth. The key issue is where one sets the cap. I do not claim to be an expert, but I have been told that some evidence suggests that the cap was set at too low a rate in the inefficient financial markets in some American states, which caused some of the problems that have been mentioned. The European experience, however, has been better.
	I have referred to my criticisms of the Policis report, which we do not need to examine in great detail, but I know that Professor Reifner has said that the report's specific conclusions in relation to Germany were absolutely incorrect, and he has provided the Department with evidence that proves that point. I do not know whether the hon. Member for Lichfield (Michael Fabricant) has seen a copy of the report, but the Sparkassen claim that the report is wrong, too. The concerns about the report must be addressed.
	I welcome the Minister's remarks. Both sides of the discussion have legitimate points to make, and both share the same ultimate objective. It is excellent that we can continue this dialogue by leaving the door open and that the Minister is interested in hearing and seeing independent evidence.
	One interesting question concerns the relationship between a maximum rate and an unfairness test. I am not a lawyer or parliamentary draftsman, so I cannot answer that question definitively. We used the phrase, widespread consumer detriment to avoid confusion around the unfairness test. We used another form of words to avoid directly influencing decisions on the definition of unfairness, but I accept that that matter must be thought through. I point to the example of the South African Department of Trade and Industry, which has introduced consumer credit legislation that performs both of those functions at the same time. The legislation introduced a cap on maximum charges as well as a new test of reckless lending. The South African example shows that it is possible to have both an unfairness test and a maximum rate. Although the details may be different, the principle of two mechanisms is clear in the South African legislation, and I cannot see why it is not possible to combine two such mechanisms in this Bill.
	Although greater clarity on interest rate charges and recourse to the courts will be useful to many consumers, I fear that the poorest consumers will not necessarily be able to avail themselves of either legal action or information and advice, which is why my party remains of the view that intervention by the Government in the form of a maximum rate is desirable to protect the most vulnerable.

Gerry Sutcliffe: The alternative dispute resolution process is due, and it will give vulnerable consumers the opportunity to get out of such agreements. The FOS's decision is binding, so consumers will not even have to go to court to get out of a particular agreement.

Adam Price: Legal advice will still be required as part of that process. We will have to revisit the matter because maximum interest rates have had a positive impact in other countries. I welcome the Minister's statement that we will not have to wait for another 30 years to make such a change because the Government are committed to reviewing the matter. In that spirit, I beg to ask leave to withdraw the motion.
	Motion and clause, by leave, withdrawn.

Clause 6
	  
	Statements to be provided in relation to fixed-sum credit agreements

Gerry Sutcliffe: I beg to move amendment No. 1, in page 5, line 31, leave out 'on the day' and insert 'immediately'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following Government amendments: Nos. 2 to 4, 6 and 7, 9 to 13, 19, 14 to 18 and 20.

Gerry Sutcliffe: These are technical amendments to ensure that the Bill works effectively. They mean that the obligations on business are clear and that consumers are protected.
	Amendment agreed to.
	Amendment made: No. 2, in page 5, line 34, leave out first 'on' and insert 'at the end of'.[Mr. Sutcliffe.]

Clause 11
	  
	Failure to give notice of sums in arrears

Amendments made: No. 3, in page 9, line 29, leave out 'on the day' and insert 'immediately'.
	No. 4, in page 9, line 31, leave out 'on' and insert 'at the end of'.[Mr. Sutcliffe.]

Clause 16
	  
	Time Orders

Gerry Sutcliffe: I beg to move amendment No. 5, in page 11, line 27, at end insert
	'(   )   In section 32(1) of the Sheriff Courts (Scotland) Act 1971 (c. 58) (regulation of civil procedure in sheriff court) after paragraph (l) insert
	(m)   permitting the debtor or hirer in proceedings for
	(i)   a time order under section 129 of the Consumer Credit Act 1974 (time orders), or
	(ii)   variation or revocation, under section 130(6) of that Act (variation and revocation of time orders), of a time order made under section 129, to be represented by a person who is neither an advocate nor a solicitor.
	(   )   In section 32(2B) of the Solicitors (Scotland) Act 1980 (c. 46) (offence for unqualified persons to prepare certain documents)
	(a)   after represent insert (a);
	(b)   after cause insert
	(b)   a debtor or hirer in proceedings for
	(i)   a time order under section 129 of the Consumer Credit Act 1974 (time orders); or
	(ii)   variation or revocation, under section 130(6) of that Act (variation and revocation of time orders), of a time order made under section 129.'.
	I promised to introduce this Government amendment in response to the concerns raised by several. Members on Second Reading about Scottish time order applications. The amendment enables Scottish courts to allow debtors or hirers to be represented by a person who is not a solicitor or advocate in proceedings covering time order applications or the revocation or variation of time order applications. That will put Scottish consumers on an equal footing with those in the rest of the UK, enabling them to be represented by, for example, a money adviser or Citizens Advice Scotland employee. I am happy to address the matter to ensure that the situation in Scotland is equivalent to that in the rest of the UK.

Malcolm Bruce: I thank the Minister for moving the amendment. There was clearly an anomaly, in that, for historical reasons, the situations in Scotland and England differed. The Consumer Council has made representations to that effect. Clearly, accessibility will be made easier and cheaper than it was under the old unnecessary requirement. People can still use a solicitor or other professional if they wish, but they will be able to make their own choice about how to make representations, and that is very welcome. I am grateful to the Government for bringing Scotland into line.

Mark Lazarowicz: Given the subject matter of the amendment, I should declare an interest as a member of the Faculty of Advocates, even though it goes against that interest. Like the hon. Member for Gordon (Malcolm Bruce), I welcome the amendment and the fact that the Government have recognised the concern raised by several Members from Scotland when the issue was raised early during the Bill's process. Citizens Advice Scotland has taken the lead in pushing for the change and is pleased that the amendment has been tabled at this stage. I spoke to CAS representatives earlier this week and they were delighted.
	On the face of it, the amendment is a small one, but it will have important implications, together with the extra funding that the Government and the Scottish Executive are giving to the Money Advice Trust and organisations that work in the area. We should now see a bigger take-up of the opportunities given to those who represent debtors who find themselves in difficulties. The amendment is worth while and I am glad that the Government have tabled it. I commend the Minister for moving so quickly.
	Amendment agreed to.

Clause 17
	  
	Interest payable on judgment debts etc.

Amendments made: No. 6, in page 12, line, leave out 'on the day' and insert 'immediately'.
	No. 7, in page 12, line 12, leave out first 'on' and insert 'at the end of'.[Mr. Sutcliffe.]

Clause 19
	  
	Unfair relationships between creditors and debtors

Malcolm Bruce: I beg to move amendment No. 21, in page 13, line 19, at end insert
	'(2A)   For the purposes of this section, an agreement shall be automatically unfair if the court determines that
	(a)   at the time of making the agreement the debtor could not reasonably have been expected to maintain the level of payments required under the agreement; or
	(b)   the lender made inadequate attempts to determine the financial circumstances of the borrower at the time of entering into an agreement.'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendment No. 8.
	Amendment No. 22, in page 63, line 2 [Schedule 3], leave out paragraphs 14 and 15 and insert
	'14  The court shall not make an order under section 140B of the 1974 Act in connection with a credit agreement made before the commencement of section 20 of this Act.
	15  The repeal by this Act of sections 137 to 140 of the 1974 Act shall not affect the court's power to reopen an existing agreement under those sections.'.

Malcolm Bruce: The purpose of the amendment is to address the accumulation of credit, putting some responsibility on providers of credit to ensure that people who are given it have the capacity to repay. Members will understand why such an amendment is justified, even if this one is not in quite the right format. The Minister has referred to the maturity, development and sophistication of the UK credit market, but we have reached the point at which people no longer have to ask for credit. It arrives on our doorsteps, sometimes in piles. We receive offers for credit cards with substantial limits, cheques and bank loan offers. We have all received them. Open the envelopes, and we find that a 7,500 cheque can be ours today to send to a bank. No security is required, and seductive letters suggest we might want to go to Hawaii and do this or that. All we have to do is bank the cheque.
	Most of us probably have several credit cards, and if we look at the limits on all of them we might be surprised to find how much access we have to instant credit. For most of us, I hope, it is more than we would wish or intend to use, but some people get themselves into a complete mess. It seems disreputable, to say the least, for large financial institutionswe are talking here about the biggest, most reputable brand names in the businessto offer credit without making any attempt to find out what other lines of credit we have, whether we have a mortgage, what security we can offer and what our circumstances are. They are relying simply on the fact that the majority of people will act responsibly and in their own interests. The majority of people do manage, and do whatever they will dobut some people will take full advantage of all the credit made available, then find it impossible to manage their debt.

Michael Fabricant: I am very interested in the amendment and have great sympathy with what the hon. Gentleman is saying. However, paragraphs (a) and (b) talk about the obligations of lenders to find out the total indebtedness of the person to whom they are lending. To what degree can one put responsibility on the lender when it may be that the person borrowing the money will not disclose all the borrowing he or she has? A person may need the money desperately, and if that happens is the hon. Gentleman saying that the lender should be held responsible?

Malcolm Bruce: I hope not. I hope that the amendment is worded to address that. It says that the debtor
	could not reasonably have been expected
	and that
	the lender made inadequate attempts.
	My concern is that, in some cases, the lenders make no attempt to find out circumstances. I am certainly not trying to cover the situation in which someone has wilfully misrepresented their circumstances to the lender, or saying that that should place an obligation or blame on the lender. I want to cover the case where the lender has not taken reasonable and responsible steps to ensure that the person to whom they are offering credit has the capacity to repay.
	There are two reasons for that. The first is a basic duty of care, an obligation or a responsibility to ascertain that people have that capacity. Secondly, there is an extraordinary contradiction here with the way in which financial institutions usually work. If we want a mortgage or to take a bank loan for a specific purpose, we have to fill in forms and forms and forms, often involving declaring things we hardly remember to calculate, such as our council tax payment, golf club subscription, salary, wife's salary or donations received from great-aunt Matilda or whatever. We have to give all that before institutions consider whether to offer a loan for a car or a house or whatever it may be.
	Yet on to our doormats drop credit cards such as the one that fell on mine with a 7,500 limit if I just phoned the number so that I could use it immediately. The issuer had no idea what my circumstances were or what credit I had. Citizens advice bureaux and many newspapers have had cases; indeed, this is a rich seam for many tabloids because they can find cases of people in hardship every day.

Mark Lazarowicz: No matter what the ultimate fate of the amendment, there is great sympathy across the House for what the hon. Gentleman is saying. When letters arrive on our doormat, however, we can at least ignore them. Does he accept that an even more difficult and unacceptable situation arises for the consumer when some credit card issuers harass people at such places as airports, just when they are going off on holiday? Does he agree that it is even more outrageous effectively to invite people to take on an extra debt of thousands of pounds at the very time when they may be most vulnerable to such appeals? Is that not an example of the kind of practice that must stop? Should not the lenders who engage in such practices take that message away from both this debate and the general debate we have been having on such subjects?

Malcolm Bruce: I understand that point: whenever I go to Edinburgh airport I am accosted, and I am frequently accosted at Aberdeen airport, too. Usually, I am accosted by people on behalf of the best-known brand names: Shell promotes at Edinburgh, as does the Royal Bank of Scotland.
	I must balance what I am saying by adding that consumers, of course, have some responsibility and should have a sense of care for themselves. One could say that many people who get into difficulties do so knowingly, but they will say, The money was available and I could not resist the temptation or did not see how fast I was building up debt. We can say we have no sympathy for those people and ask why they do it. In reality, they could not have done it if the credit was not made so easily available. What I am trying to say is that we need to show the financial institutions that we expect them to take some responsibility by not putting that degree of temptation in the way of people who will get themselves into difficulty.
	In a particular case, covered, I think, in the Sunday Mirror, someone managed to take out 125,000 on 11 credit cards and in six loans while on a salary of 16,800. The person in question says that he was stupid and brought the situation on himself He describes how the heavy mob was effectively sent in. He says that the debt
	will never go away, it will follow us until we die.
	It is awful when people get into such a situation. I am not suggesting that people should not be educated at school about personal finance and responsibility, which is a point made by the Daily Mirror and the debt on our doorstep campaign. Frankly, however, part of the education process should be undertaken by the providers of credit.
	First, such providers should always try to ascertain whether people can afford a product, so they should find out about people's circumstances by getting honestly presented evidence of their income and other loan obligations. Secondly, the providers should give advice about the appropriateness of their products. I am worried about the number of people who take out credit on credit cards when it would be much more appropriate to obtain such credit through a bank loan or another product that would be cheaper, more manageable, more organised and less likely to lead to considerable difficulties.
	Products are promoted not only when people are going on holiday, but through 0 per cent. introductory offers. I have already said that I am not against the 0 per cent. special offersindeed, I have taken advantage of them. They are, however, an easy way of seducing people. People are encouraged to take out 10,000 of credit with no interest to pay for six or even nine months. The problem is that they do not have the ability to pay after that time, so under the credit card companies' calculations, they must pay an interest rate of 15, 18 or 20-plus per cent. However, the companies do not say to people, Now that you are in this mess, you should convert the credit to a loan or a cheaper product. However, that goes slightly wide of the mark of my amendment.
	Amendment No. 21 would make it clear in the Bill that the providers of credit would be obliged to take reasonable steps to determine the circumstances of people to whom they provide credit. That suggests to me that unsolicited credit should not be offered without a second test. People such as the hon. Member for Rhondda (Chris Bryant) might well think that unsolicited credit offers should not be sent out at all, but I am not sure that I would want to inhibit product development in such a way. However, it should be made clear that such credit is being offered as long as the provider can satisfy itself that people have the ability to pay. The providers should make it clear to people that they have to answer specific questions satisfactorily before the credit is given.

Michael Fabricant: For the sake of clarity, would the provision apply not only to financial institutions, but to car retailers and furniture vendors? Such businesses advertise regularly on television and offer nothing to pay for six months, 10 months or a year, after which time people must pay for the credit.

Malcolm Bruce: Yes, but there would be a reasonableness test. I agree with what I anticipate the hon. Member for Tewkesbury (Mr. Robertson) would say at this point. I want flexibility and choice in the marketplace. I am certainly not against special offers or inducements. A genuine offer of 0 per cent. interest for six months is a valuable commodity, provided that the price of a product is fair. If a person is buying a car for a given price and has one offer involving paying 0 per cent. interest for six months and another offer that would lead to charges immediately, one deal is incontrovertibly better than the other. I would not want to do anything to close such options. All I am asking is for the providers of credit to take reasonable steps to ascertain people's circumstances, thus protecting them from their lack of responsibility or self-control. I qualify that requirement with the words reasonably and inadequacy, which are used in the amendment.
	I think that the Minister will acknowledge that the expansion of such credit and the increase in bankruptcies, default and personal debt has much to do with the fact that it is excessively easy to access unsolicited credit. Such credit was not available 30 years ago. Credit was hard to come by then, not least because we had credit squeezes when the Government made things more difficult. I do not think that any of us wants to go back to those days, but we want a little discipline. Frankly, the providers of credit are the people best able to achieve that, rather than the Government or a third-party regulator. We simply require a reasonable test of how people should pay for credit. People should also receive advice on the products that they require. Why should they pay credit card interest rates when they could pay bank loan rates? It is distasteful that banks encourage their own customers to take credit on credit cards when they could offer cheaper credit through other products.
	I imagine that the Minister will say that my amendment would have the disadvantage of qualifying the unfairness test, as he has said about other amendments. I understand that, but I hope that he accepts that my amendment is drafted in the spirit of many of the findings of the Treasury Committee. The Committee is not hostile to the expansion of credit or the availability, variety or flexibility of products, but it is worried that many people find themselves in serious financial distress because credit is too easily available and the providers of it do not determine responsibly whether people can afford it. They do that because they assume that they will get their money back from most people by using ruthless methods and making people's lives a misery, so they decide that the odd default will not matter given that the vast majority of people will struggle, but pay. However, for such people, the glamorous offer of credit that was supposed to enhance their quality of life leads to long-term misery. Surely we do not wish to encourage such a credit regime.

Chris Bryant: As was the case when we debated an earlier group of amendments, I wholeheartedly support the aim of amendment No. 21. I said in Committee that we must remedy a series of mischiefs in the market. It is true that credit card companies and other lenders wish to perpetuate a cycle. They want someone who has one credit card and pays it off every month to choose not to pay it off every month and thus start to accumulate charges. They want people with only one credit card to end up with several, and hope that those who have several cards will take out a personal loan secured against their home. The process is designed to increase the amount that people borrow and the length of time for which it is borrowed. The aim is for the lender eventually to provide a person with a secured loan so that it knows that it will not be out of pocket.
	Although the vast majority of us understand the market, accept that caveat emptor is a good principle and are aware that people should appreciate that there is an onus on them to attempt to understand the precise nature of a loan agreement before entering into it, there is none the less such competitive stress in the market at present that pressure exists on all businesses to perpetuate and increase that cycle. In many parts of the country it is an entirely virtuous cycle, but in some parts it ends up as a vicious cycle into which individuals and families can all too easily fall because they do not understand either the nature of the agreement or whether they can afford the debt. We all know of individuals and families in our constituencies who have ended up in terrible difficulty for all sorts of genuine and complex reasonsnot for devious reasons or because of their fecklessness. Debt can place significant stresses on families and individuals.
	The amendment would go some way towards addressing the mischief of not only indiscriminate marketingall marketing is indiscriminate to a degree because it is pumped out to everyonebut indiscriminate direct mail marketing. It is the stuff that lands on someone's doorstep with no check having been made on who that person is. I mentioned in Committee that I received correspondence from HFS. The letter was headlined Debt Busting Loan. I do not understand the concept of a debt-busting loan; it seems to be a debt-increasing loan to me, but clearly the approach works. HFS sent me another letter. The first was sent to my apartment in London and the second to my house in Wales, to ensure that I got the message that I could take out a loan and that it had already approved a loan. I had to answer only a few questions, and not a question about the amount that I earn every year or one about other debts. One question was whether I was 18 years of age. I was slightly flatteredwell, very flattered.
	If an organisation is sending a letter asking someone to prove that they are over 18, by definition it does not know whether the person is over 18. I believe that that contravenes the banking code of conduct, and in turn suggests that the organisation should not be marketing to people who are under 18. It suggests that it is feckless about establishing to whom it is marketing. It may be legitimate to use poster boards or to advertise on television or radioobviously that type of marketing is less discriminatebut with direct mail, the organisation should be required to ensure that it has established who it is marketing to.
	There is also the process of credit card pushing. There is a pre-approved credit card application form. It is necessary only to state, Yes, I want it, and sign it. That having been done, the individual has got it. Often, the company has already sent out the card through the post.
	Credit card pushing has become endemic. Someone might go to Selfridges on the last day of the sales. They are told that if they take out a store card on the spot, they will get 10 per cent. off their purchases on that day. The individual thinks that all they are doing is getting a store card. A week later, they will be sent a pre-approved credit card as well.
	If someone takes out a Tesco points card, likewise a week later they will be sent a pre-approved Tesco credit card application form. The process of constant pushing of credit cardsmany people say, I might as well have another one, what harm does it do?means that a letter will arrive at a difficult or vulnerable time of year, which says, We have increased your credit limit. Lo and behold, they get into precisely the sort of trouble that the Sunday Mirror highlighted at the weekend.
	So often, there is the factor of the overblown nature of the marketing. I believe that sometimes the letters that are sent out are deliberately misleading. Their content tries to make people focus not on what should be the key issue to those who are entering into an agreementCan I afford to borrow this money?but on other issues. There is a classic example. I mentioned in Committee that I received a letter from Capital One, which was designed to persuade me to take out a card. I was sent another letter because I did not take out a card. With Capital One, the most exciting thing that anyone can do is choose the design of the credit card. It is that on which the company tries to focus people. There are four small sticky colour maps and the recipient can choose to stick one of these on the card and return it. Surely that is a deliberate attempt to try to get people to focus on the least important issue when taking out a credit card, rather than the important one. It is, again, an instance of irresponsible marketing.

Michael Fabricant: I want to ensure that the hon. Gentleman mentions contact by telephone as well. MBNA is a company that uses a firm in Bangalore to phone people to ask them to take out credit cards. How much research has been carried out in Bangalore when such a contact is made? Unfortunately, I have never been asked whether I am under 18.

Chris Bryant: Not even when that was the case?
	The hon. Gentleman makes an important point. When I telephoned the Royal Bank of Scotland two weeks ago to confirm that I had received my new debit card, I was asked whether I wanted another credit card. The person on the phone knew that I already had a credit card, but I was asked whether I wanted another. It seems that some of the credit card companies have an addiction. They want to push more and more cards at us. I sometimes wonder whether people are being paid by results. In other words, people are paid more if they persuade people to take out more cards, regardless of whether it would be sensible to do so.

Malcolm Bruce: New cards are issued, and people used to think that the purpose of a credit card was to buy a product. However, after three or four days of issue, a phone call is made, saying, We can transfer the entire credit limit from this card to your bank account today by authorisation from you over the phone. That is making it incredibly easy for people to get into difficultiesI suspect much, much too easy.

Chris Bryant: I agree. The second half of my conversation with the Royal Bank of Scotland was to do precisely that. That is the telephone version of the unsolicited blank or filled-in cheque. I am sure that hon. Members will know about receiving a credit card cheque through the post. The individual thinks that it is probably more likely to be a credit card loan. He or she probably does not expect that interest will be charged from the moment that the cheque is paid into their bank account. The process deliberately makes taking out extra loans too easy, in my understanding.
	The hon. Member for Gordon (Malcolm Bruce) referred earlier to cheques that have a certain amount filled in, but I believe that blank cheques are even worse. On my HFS loan card I could actually fill in the amount on the blank cheque with whatever figure I wanted. I could pay it into my bank account and, lo and behold, from that moment I would be paying interest at a fairly high APR.
	All these problems are endemic in the industry, which needs to roll itself back from this positionpartly for its own good, because there may come a time when interest rates rise and people find it much less affordable to sustain their present level of debt. The Minister rightly argued earlier that, as a percentage of people's income, the amount of money expended on servicing debt is now, because of lower interest rates, considerably less than it was 10 years ago. The truth is that if interest rates did have to rise for whatever reason, many people would find themselves hideously exposed, and the industry would find itself exposed, too. That is why the industry should do some of its own rolling back. Of course, many in the industry have written to us to say that they have already done some rolling back. The new banking code, which comes into practice this spring, imposes some further restrictions on what companies should or should not do.
	I will not support the amendment because of what I suspect the Minister will argue. I expect him to say that it would conflict with the unfair relationship clause, which we debated in Committee. I am nervous about the fact that so much is hanging on a fairly slender thread. We do not really know whether it will be a slender thread or a hefty rope capable of sustaining the weight. My metaphors are becoming too complex nowadays, Mr. Deputy Speaker, and I feel that I should draw my words to a conclusion.
	I hope that the Bill will manage to operate in precisely the manner outlined by the hon. Member for Gordon and that it will help to roll back these practices. I believe that they currently expose people to excessive risks. They are irresponsible and feckless. We want a mature industry that provides people with opportunities to manage debt responsibly, and we need to ensure that that is made possible for everyone in the country.

Laurence Robertson: I want to deal mainly with amendment No. 22, which relates to retrospection, but I also want to add a few thoughts about our debate on amendment No. 21, which was ably moved by the hon. Member for Gordon (Malcolm Bruce). He touched on many important issues and I agree that it is far too easy for people to take out credit these days.
	The hon. Member for Gordon rightly drew attention to the fact that when a 150,000 mortgage is applied for, every nook and cranny will, quite rightly, be examined. It is a major commitment on behalf of the lender, as well as the borrower, which is why such an application is so seriously looked into. Unfortunately, that does not happen when someone wants to borrow just 3,000. I know from private conversations that lenders do not really look into the proposal too seriously. If they lost one or two lots of 3,000 here and there, they would still be making enough out of the interest on the many other lots of 3,000 for it not to matter that much. They tend not to bother too much about applications for relatively small amounts. The problem is, of course, that people can borrow 3,000 from this company, another 3,000 from that company, and so forth. One lot of 3,000 is not very much, but when they are all added together, it could represent a significant debt for an individual.
	I well understand how easy it is for people to get into great difficulty. While we were debating the Bill in Committee, I recall hearing a report on the Today programmea very sad report that featured a widow whose husband had committed suicide because he had got into terrible debt as a result of having 22 credit cards. That really set the tone of debate in Committee. Tragic though it was, the radio programme did a useful service for our considerations, but we all wished that the tragedy had not happened in the first place.
	I was concerned about the issue and tabled an amendment on data sharing. Unfortunately, it was not selected, but it would have required many changes to the Data Protection Act 1998, which we are not considering; we are amending the Consumer Credit Act 1974. In it I sought to make it easier for lenders to share information on potential debtors. The credit reference agency carries many details on people who have defaulted or been late with payments or who have county court judgments. That is fine, but often they do not share information on how many credit cards people have or what their level of income is. That is where the problem begins because it is so easy to take out many credit cards.
	I do not wish to add to the anecdotes, but over Christmas I had such an experience. I bought several items from Marks and Spencer. I was not paying much attention to what I was doing. It was hot in the store and I just wanted to get out and get home. I ended up signing up to what I thought was just a points card but turned out to be a MasterCard, with which I could instantly spend up to 7,500 anywhere in the country. I did not ask for that or want it. That is how easy it is to take out a credit card. The minimum number of checks was done. Presumably a credit check was carried out, but the store had no idea whether I had other credit cards and no proof of my income. I am probably reasonably safe with that credit card, but many people are not. In my amendment I wanted to enable lenders to have access to information in that situation.

Gerry Sutcliffe: If I may, I should like to help the hon. Gentleman on data sharing. I understand the principle of what he was trying to achieve, even if I do not understand why it was not ruled in order. I received a draft paper from the Financial Ombudsman Service on issues surrounding data sharing. Officials are currently working closely on it with stakeholders. We believe that data sharing is a necessary and important means of ensuring responsible lending. I put that on the record so that the hon. Gentleman knows that work is being carried out on the issue.

Laurence Robertson: The Minister is as helpful as ever. We have made enough points on that amendment, and I agree with him in principle.
	Amendment No. 22 relates to retrospection with particular respect to the unfair test which replaces the extortionate test in the 1974 Act. We approve of the change of test of an agreement's legality from extortionate to fair. It fits with the reasonable requirement and test of English lawreasonable being the most important word in English law. Given the nature of this business, it is possible that some retrospection is necessary. For example, is it not the case that a respectable company would only ever enter into what could be considered a fair agreement with an individual? If an unfair agreement continues to run, is it not right that the courts should be allowed to look at it and bring to an end the suffering of the weaker party? I accept that there are some reasons for retrospection.
	Several problems result, however. Philosophically, legislation is not normally retrospective. Indeed, it is a principle of legislation that it should not be retrospective because it is unfair in itself for someone to be fined or punished or have their business disbanded because some years previously they behaved in a manner that complied with the law then, but the law has subsequently changed. As the Finance and Leasing Association has said, applying laws retrospectively is equivalent to recording a motorist driving 40 miles an hour on a 40 limit road in 1995, but fining that motorist in 2005 because the speed limit has subsequently been reduced to 30. That sums it up. As all students of history will agree, figures of the past should be judged by the standards of the times in which they lived, not by the standards that exist now.
	Retrospective legislation is bad enough, but not having the requirements of the legislation in the Bill is worse, because lenders will not know what they are supposed to be doing retrospectively. The Bill does not state what will constitute an unfair agreement, and that is the crux of the matter. We will never be completely certain of what constitutes an unfair agreement, because the courts will have to decide in each case, and one case will not set a precedent for subsequent cases unless they are identical.
	The Government and the Office of Fair Trading may issue guidance, but if it is considered to be a remedial order, it might contravene schedule 2 to the Human Rights Act 1998 unless it is laid before Parliament. There is no suggestion in the Bill that that is the intention.
	The unfairness test is retrospective, and I understand that it will apply to agreements reached before enactment of the Bill, certainly in some respects, if not all. There will be a transitional period, which the Secretary of State can extend, but existing agreements will be affected.
	A further point, which is slightly complicated, is that if the industry complies with the original guidance and it later changes, will we be creating further retrospection because of the fluid nature of the business and the change to the guidelines? Leaving those details out of the Bill is a backward step, because section 138 of the Consumer Credit Act 1974 defines the meaning of extortionate by listing the evidence that should be taken into accountfor example, prevailing interest rates; the age, experience, business capacity and state of health of the debtor; the degree to which he was under financial pressure at the time; the degree of risk accepted by him; his relationship to the lender; and whether a cash price was quoted for any goods or services included in the credit bargain. The Bill repeals that section, leaving lenders totally in the dark about what constitutes an unfair agreement. I tabled amendments in Committee which would have gone some way towards addressing the problem, but sadly, the Government did not accept them.
	That vagueness has led to a great deal of unrest and concern in the industry. I have received representations from, among others, the British Bankers Association, the Council of Mortgage Lenders, the Consumer Credit Association, the Finance and Leasing Association, the Association for Payment Clearing Services, Cattles, Royal Bank of Scotland, Barclays, the Zacchaeus Trust and MBNA Europe Bank Ltd. All are concerned about the lack of guidance on the unfairness test, and that concern is increased by the retrospection in the Bill.
	As I said, there is a transitional period for the industry to clean up its act and to clean up the agreements that it feels it should clean up, but how can it do so if it does not know what the criteria are for determining what represents an unfair agreement?

Gerry Sutcliffe: Does the hon. Gentleman accept that there is unfairness throughout the financial services and that the code of practice relates to that? The concept of fairness exists, and the industry is trying to do something that we resisted in the discussion on interest rate ceilings. If the test is tightly defined, there may be omissions, and vulnerable consumers may be left in a worse position.

Laurence Robertson: I am grateful to the Minister, but I do not entirely accept that putting something on the face of the Bill means that something is left out. I suppose that by definition it is, but it is possible to put on the face of the Bill some examples of what the courts might want to give credence to. That does not mean that the courts cannot look at other things as well. Many Acts of Parliament contain clauses that end by saying, and the Secretary of State shall do whatever else he thinks fitI paraphrase, but I think we all recognise that such a provision appears in very many Acts of Parliament. I think it is called a Henry VIII clause or something like that. So I do not accept that stating some examples of what the court should take into account means that it cannot take into account other things.
	To summarise, I stress that we welcome the change from extortionate to unfair. We accept that some retrospection is necessaryperhaps even desirablein this type of legislation, but we do regret the lack of detail as regards what constitutes an unfair agreement. We also regret the fact that retrospective legislation is effectively being introduced by the courts, and possibly the OFT and Ministers, but not Parliament. That is the point. It is, as I said in Committee, a double whammy. It is retrospective legislation, introduced other than by Parliament. That cannot be the right way of carrying out what is generally appropriate legislation, and therefore I would ask the Minister to reconsider his approach in this respect.

Alan Williams: I shall be brief. When I took the Consumer Credit Bill through Parliament in 1974, I did not expect to be able to stand here 31 years later discussing its amendment. I am amazed that it has lasted quite so long, and indeed that I have lasted quite so longpolitically, I mean, not physically.

Chris Bryant: Too long.

Alan Williams: In which respect?

Chris Bryant: The Act.

Alan Williams: I have every sympathy with what the hon. Member for Gordon (Malcolm Bruce) said, and the spirit of the debate so far, but it seems to me that we are choosing the more difficult alternative of making increasingly complex definitions of what is fair without trying to cut through the knot.
	When I was taking the 1974 Act through Parliament, I appalled the credit reference agencies by announcing that for the first time they were going to be subject to the law of libel. At that time they literally depended on gossipthe local milkman, the local bread delivery man and so onwithout verification. I remember being asked to go to Croydon to discuss it with them. I put it to them that if they could not get their act together, it was for them to bear the consequences; it was not for me to exempt them. In fairness, despite all their protestations that the credit reference agency industry was about to collapse, they actually did get their act together, have become very professional, and could become more professional.
	I hope that you will bear with me, Mr. Deputy Speaker, if you think that I am straying slightly from the amendmentI will be very brief. It seems to me that data sharing by the credit industry with the credit reference agencies is the way of cutting through the complexities of ever more amendments stating what is fair and what is not, trying to meet the manoeuvrings of the industry. Because if there is a focal point at which information is available, from which one is expected to obtain information on creditworthiness, and that body has collectively what no individual card issuer hasa knowledge of what other cards a customer has when he applies for his 50th or 60th or second or thirdit would seem to me that that is the way through. I know that I have a very old-fashioned approach to legislation, but if it were me, I would be looking to credit reference agencies as a way of short-cutting to the objectives that we all hope to achieve.
	That is all I want to say; my apologies to the Minister for delaying him.

Gerry Sutcliffe: I am delighted that my right hon. Friend the Member for Swansea, West (Mr. Williams) is in his place, and I congratulate him on the 1974 Act, which has stood the test of time. I understand that it took nearly six years to put that Act together. I spoke earlier about the maturity of the credit industry. Who would have recognised, when my right hon. Friend introduced that legislation, that the availability of products would change so dramatically? I shall refer later to the data sharing that my right hon. Friend talked about.
	I want to speak briefly to Government amendment No. 8, which is a minor technical amendment to clarify the wording of proposed new section 140A(4) of the Consumer Credit Act 1974. The new wording is more precise and makes it clear that the court would be able to apply any provisions where all or any of the parties had no further duties under a credit agreement covered by the new unfair relationships provisions. The amendment will not alter the test or change the circumstances in which the provision applies to agreements. It will clarify the wording to improve understanding.
	I understood clearly where the hon. Member for Gordon (Malcolm Bruce) was coming from when he outlined the proposals in his amendment No. 21. He spoke about marketing techniques and the need to provide education all the way through school about handling money and developing ideas about it, and it is amazing to me that although we teach youngsters about everything, money and how to handle it is not at the forefront of that. A lot of work is being done on that, not least with the new financial inclusion fund.
	An aspect of the Bill that I am passionate about is the momentum that we have developed, through the White Paper and surrounding issues, and the fact that there is an acceptance that things must change. We affect people's lives. The hon. Member for Tewkesbury (Mr. Robertson) raised the issue of the Today programme and the unfortunate case of the man who committed suicide. I have, as a Consumer Minister, had too many approaches for my liking from hon. Members with constituents who have had great difficulties and in some cases have committed suicide because of the spiral of debt that they have got into. Surely we have a responsibility to promote legislation to help to avoid that.
	The industry must have a job to do. The sentiments of the hon. Member for Gordon are right and proper. Perhaps he will expect me to say that the wording of the amendment is not quite rightI shall come to that a little laterbut the message from all hon. Members is clearly that the industry must look at its marketing techniques and its responsibilities.
	We can and will pass legislation, and we try to do that in a way that is as business-friendly as possible, but supports consumer groups and consumers. The industry has a major role to play. The availability of credit is important to all the groups that we have mentioned, but it must be available on a responsible basis. The Bill will enable us to look at instances in which the industry does not operate properly.
	Data sharing is vital. At conferences that I have attended, the industry has raised the point that the Data Protection Act 1998 and other factors prevent the sharing of information, with, for example, credit reference agencies. I have made it clear that, as I have said already today, the 1998 Act should not be used as a barrier to the sharing of that information. I am pleased that work has been carried out with organisations such as the Finance and Leasing Association, that members of the Association for Payment Clearing Services agreed data-sharing principles in September 2004, and that the DTI has been discussing further measures to improve current levels of data sharing within the credit industry.
	As the Minister, I shall, as far as I can, ensure that we pursue the industry to honour its commitments to ensure that people cannot accumulate debts of low amounts on many different credit cards; I do not think that is acceptable.
	Clause 19 is wide enough to allow the courts to take into account the factors that the hon. Member for Gordon listed, as well as any other relevant matters. Therefore, amendment No. 21 is unnecessary. The unfairness test is concerned not with specific types of behaviour but with the unfairness of the relationship between the debtor and the creditor. It allows the courts to decide on the basis of the widest possible range of behaviour without being constrained by market practices or issues of concern. We want the test to be able to deal with the ingenuity of those seeking to exploit and harm consumers. Therefore, the court can consider the types of practice that the hon. Gentleman identified, and can provide remedies when such practices make the relationship unfair.
	The hon. Gentleman's amendment might even be unhelpful. It is vital that the proposals do not limit the court's discretion in matters of unfairness. That would serve to do two things: narrow the range of matters that the court will consider in determining whether something is unfair, and encourage a culture of minimum compliance by businesses, which operate on the basis that if the practice is not expressly outlawed in law, it is permitted. The hon. Gentleman's proposals would not enhance the test, are unnecessary given the breadth of the test, and may prove to be unhelpful to consumers by limiting the test's operation.
	I have set great store by this test. My hon. Friend the Member for Rhondda (Chris Bryant) said that it was a thin thread; I hope that it is more than that. It is a lower hurdle than the extortionate credit test in the 1974 Act, and will capture the core of what we are trying to achieve: responsible lending and responsible borrowing. If someone acts unfairly, they will be seen to be outside the spirit of what we are trying to achieve.
	Amendment No. 22 proposes that the new unfair relationships provisions should apply only to agreements made after commencement of those provisions. We have consulted widely on the issue and considered it carefully. It might help hon. Members if I explain precisely what the Government propose. Unfair relationships provisions will commence in line with the other provisions of the Bill, and we will consult on when that will occur. That means that the new test will apply to new agreements made from the date of commencement. The new test will apply to existing agreements after the end of the transitional period. We believe that that will give businesses time to adjust. The transitional period will last for at least 12 months after commencement.

Laurence Robertson: The transitional period may give businesses time to adjust, but the question isadjust to what? That is not in the Bill.

Gerry Sutcliffe: I fear that we will disagree on this issue. Let me move on and see whether the following helps the hon. Gentleman.
	As the transitional period will last for at least 12 months after commencement, existing agreements will not be subject to the new test for at least two years after Royal Assent. However, that is not set in stone; we will consult on whether the period should be extended. It is important to realise that provisions will not apply to agreements that come to an end before the completion of the transitional period. I understand the hon. Gentleman's concern about the effect of the new unfair relationships test on existing agreements, but the position that we have reached is not without precedent. When the extortionate credit test was enacted in 1974, it applied to all agreements whenever they were made. The new test, as I have said, does not do that. Moreover, the current test does not allow consumers to challenge post-agreement conduct effectively.

Laurence Robertson: The Minister refers to the 1974 Act, and yes, it was retrospectivebut my point is that the items with which businesses had to comply were in that legislation. They have been repealed and replaced with nothing. That is my objection to the retrospective nature of this Bill.

Gerry Sutcliffe: They have not been replaced with nothing; they have been replaced with the unfairness test. I will resist until the end, and will not give a prescriptive list of circumstances.

Chris Bryant: Go on.

Gerry Sutcliffe: Despite my hon. Friend's plea, I will not give a definitive list, because that would undervalue the test.

Laurence Robertson: It is not in the Bill.

Gerry Sutcliffe: As I have tried to explain to the hon. Gentlemanin Committee and this afternoonthe concept of unfairness is enshrined in many areas of financial services.

Laurence Robertson: It is not in the Bill.

Gerry Sutcliffe: The courts will be able to reflect and consider the issue of unfairness. The concept is well established, for example, in the banking code and the mortgage code, subscribers to which are instructed to act fairly in all their dealings. The Financing and Leasing Association's code of practice states that its members promise to
	act fairly, reasonably and responsibly in all our dealings with you,
	and the Financial Services Authority requires the businesses that it regulates to treat customers fairly.

Chris Bryant: Is not the truth of the matter that if businesses are uncertain or nervous about whether a product that they are about to sell, or a marketing process, such as direct mail marketing, in which they are about to engage, might be unfair, they would probably be best advised not to proceed?

Gerry Sutcliffe: That was a better attempt to get me to say yes. I hear what my hon. Friend says.
	I have tried to show that we have consulted fully on the Bill and I have left the door open to further consultation with the industry. I do not think that amendment No. 22 will take us further forward, and I ask the hon. Member for Tewkesbury not to press it. I also ask the hon. Member for Gordon to withdraw amendment No. 21, although I accept and understand the principle of what he wants to achieve.

Malcolm Bruce: I appreciate the Minister's response and the terms in which it was couched. I did not say so when I introduced it, but I regard the amendment as probing. In fact, I agree completely with him about the unfairness test and the desire not to qualify it. On the other hand, I believe that when passing a Bill that updates 30-year-old legislation, it is important to have a proper debate about how it should be applied. In our debates, we are trying to give the authorities that are to implement the legislation some idea of our expectations regarding its application. The Minister is in a particular position, in that what he says carries some judicial force, whereas what the rest of us say has no consequence, but I am optimistic enoughsome might say naive enoughto believe that the authorities that apply the legislation in such a specialist area will read the Committee proceedings and our debates to inform themselves about the thrust of what we are trying to achieve.
	Without putting words in his mouth, I think that the Minister has, in essence, gone as close as he canwithout restricting the test's applicationto stating the Government's view that consideration of the unfairness test should take on board the issues that have been raised. He knows that my colleagues and I favour the principle of applying the duty to trade fairly, or the duty not to trade unfairly, much more widely. In the present context, I agree with him: there is no point in having a test and then surrounding it with qualifications.

Laurence Robertson: Does the hon. Gentleman agree, however, that there is a difference between the 1974 Act being retrospective when the details of what was required were on the face of the Bill, and the present Bill being retrospective when the details are not on the face of the Bill? Is it not wrong to pass retrospective legislation when the details of its application are to be left to the courts to establish in a piecemeal manner?

Malcolm Bruce: The hon. Gentleman puts me in a slightly difficult positionindeed, he is trying to do so, which is fair enough. As a general principle, I am not in favour of retrospective legislation. The difficulty is that we are trying to change a culture. I examined the amendment that he tableda similar proposal came across my deskbut could not support it, not because of what I felt about retrospectivity in principle, but because I was worried that there would come a time when people involved in long-term credit agreements would see that all new agreements applied a completely different test, but their own could not be revisited because of a hangover from an Act dating back 30 years or more, which had, in effect, been repealed.
	The Minister says that there will be a transitional period, which might be extended. Although I have reservations and I understand the concern voiced by the hon. Member for Tewkesbury, my feeling is that we have identified many things that the industry has not got right and that there is a spirit of compromise in operation. In principle, retrospectivity is not a good thing; on the other hand, we are trying to change a culture. I beg to ask leave to withdraw the amendment.
	Amendment, by leave, withdrawn.
	Amendment made: No. 8, in page 13, line 25, leave out 'one or more' and insert
	'all or any of the'. [Mr. Sutcliffe.]

Clause 26
	  
	Enforcement of agreements by unlicenced trader etc.

Amendments made: No. 9, in page 18, line 33, leave out 'business' and insert
	'consumer credit business or a consumer hire business (as the case may be)'.
	No. 10, in page 18, line 41 [Clause 26], leave out 'business' and insert
	'consumer credit business or a consumer hire business (as the case may be)'.
	No. 11, in page 19, line 4, leave out 'business' and insert
	'consumer credit business or a consumer hire business (as the case may be)'.
	No. 12, in page 19, line 21, at end insert
	'(8)   This section (apart from subsection (1)) does not apply to a regulated agreement made by a person if by virtue of section 21(2) or (3) he was not required to be licensed to make the agreement.
	(9)   Subsection (1) does not apply to the enforcement of a regulated agreement by a person if by virtue of section 21(2) or (3) he is not required to be licensed to enforce the agreement.'.
	No. 13, in page 19, line 22, leave out subsection (5). [Mr. Sutcliffe.]

Clause 32
	  
	Winding-up of standard licensee's business

Amendment made: No. 19, in page 25, line 20, leave out subsections (8) and (9) and insert
	'(8)   The procedures set out in subsections (6) and (7) shall be carried out concurrently with the OFT's consideration of whether it should take the step falling within subsection (2).
	(9)   Accordingly, the OFT's determination of any application of the licensee shall be made at the same time as its determination to take the step falling within subsection (2).
	(10)   If an appeal lies from the determination of that application, the step falling within subsection (2) shall not be taken before the end of the appeal period in relation to that application and, in the case of a step falling within subsection (2)(a) or (b), section 29(4) shall apply accordingly.'. [Mr. Sutcliffe.]

Clause 33
	  
	Consequential amendments relating to ss. 27 to 32

Amendment made: No. 14, in page 26, line 10, leave out subsections (1) to (5) and insert
	'(1)   Where
	(a)   a consumer credit EEA firm makes an application for a standard licence, and
	(b)   the activities covered by the application are all permitted activities,
	the OFT shall refuse the application.
	(2)   Subsection (3) applies where
	(a)   a consumer credit EEA firm makes an application for a standard licence, and
	(b)   some (but not all) of the activities covered by the application are permitted activities.
	(3)   In order to be entitled to be issued with a standard licence in accordance with section 25(1) to (1AB) in relation to a type of business, the firm need not satisfy the OFT that it is a fit person to carry on that type of business so far as it would involve any of the permitted activities covered by the application.
	(4)   A standard licence held by a consumer credit EEA firm does not at any time authorise the carrying on of an activity which is a permitted activity at that time.'. [Mr. Sutcliffe.]

Clause 35
	  
	Charges for indefinite licences

Amendment made: No. 15, in page 29, line 15, leave out from 'on' to end of line 16 and insert
	'such day as may be determined in accordance with provision made by regulations.'.[Mr. Sutcliffe.]

Clause 36
	  
	Extension of period to pay charge for indefinite licence

Amendments made: No. 16, in page 29, line 34, leave out from 'made' to end of line 35 and insert
	'before such day as may be determined in accordance with provision made by the OFT by general notice'.
	No. 17, in page 30, line 6, leave out subsection (5). [Mr. Sutcliffe.]

Clause 52
	  
	Power of OFT to impose civil penalties

Amendment made: No. 18, in page 44, leave out lines 12 to 17 and insert
	'rate for the time being specified in section 17 of the Judgments Act 1838.'.[Mr. Sutcliffe.]

Schedule 1
	  
	Schedule A1 to the 1974 Act

Amendment made: No. 20, in page 57, line 45, at end insert
	'(4A)   Where
	(a)   the Tribunal disposes of an appeal against a determination to take a step falling within section 34A(2) of this Act, and
	(b)   at the time it made that determination, the OFT also determined an application under section 34A(6) in relation to that step,
	the Tribunal may do one or more of the things mentioned in sub-paragraph (2)(a) to (e) in relation to the determination of the application.
	(4B)   The Tribunal
	(a)   may exercise its power under sub-paragraph (4A) even if no appeal has been made against the determination of the application under section 34A(6); and
	(b)   in a case where such an appeal has been made, may exercise that power instead of disposing of the appeal.'.[Mr. Sutcliffe.]
	Order for Third Reading read.

Gerry Sutcliffe: I beg to move, That the Bill be now read the Third time.
	I would like to return briefly to the consumer credit White Paper, in which we said:
	We want a modern framework that encourages and rewards vigorous competition, innovation, choice and enterprise, while stamping out irresponsible and unfair lending practices.
	I hope that hon. Members agree that the Government have produced a Bill that not only fulfils those commitments but in many cases goes beyond them. It is the keystone of the most ambitious reform of consumer credit legislation since the Consumer Credit Act 1974 was introduced. Its passage through the House has justified the Government's position on all counts. I would like to thank hon. Members from all parts of the House for their contributions. In particular, I am grateful to the hon. Member for Bournemouth, West (Sir John Butterfill) and my hon. Friend the Member for Bootle (Mr. Benton) for their effective joint chairmanship of the Committee. I am also grateful to the hon. Members for Tewkesbury (Mr. Robertson) and for Gordon (Malcolm Bruce), as well as everyone else who served on the Committee.
	I am extremely encouraged by the support that the Bill has received from consumer groups, the industry and Members from all parts of the House. That support is reflected in the speed with which it has progressed through Parliament. Second Reading provided an insight into problems experienced by both consumers and the industry. In Committee, we had discussions of more specific and detailed concerns. In our final debate, I would like to conclude discussion on matters of particular interest, including unfair credit relationships. Hon. Members will recall the extreme care that I took in explaining the concept of unfairness.

Chris Bryant: The Minister took excessive care.

Gerry Sutcliffe: Indeed. I have no intention of being drawn back to that point. The Government have addressed the issue with extreme sensitivity. We have considered extensive arguments made by people across the sector, and I believe that the Bill provides an effective solution. Hon. Members are well aware that the market has evolved quickly and know that it will continue to do so. We cannot predict future market changes, nor should we. The Government's solution provides comprehensive and flexible protection for consumers and for the industry both now and in the future.
	We must ask ourselves some critical questions. Should the body that enforces the Consumer Credit Act have the power to investigate wrongdoing? Should consumers be able to operate confidently in the market, safe in the knowledge that they are dealing with responsible lenders? The answer to both questions is obviously yes.

James Plaskitt: As the Minister said, it is indeed an evolving market. I am pleased that he opened our debate on Third Reading by quoting the objectives of the White Paper, because the Bill is an excellent measure that goes a long way towards meeting those objectives. However, as that quotation made clear, the Bill tries to deal with irresponsible lending. The White Paper gave as an example of irresponsible lending the unsolicited issuing of credit card cheques. When we debated that practice in Committee, the Minister undertook to take action to end it. Now that we have reached Third Reading, does he believe that the Bill will achieve that outcome, and if not, does he have other means of achieving it?

Gerry Sutcliffe: If my hon. Friend can wait a few moments, I shall come to credit card cheques and what the Government intend to do about them. However, I pay tribute to him and to the Treasury Committee for their work in exposing the issue in the context of responsible lending.
	The Bill provides a regime that is based on fairness for consumers and competition for the industry, and which gives regulators the powers they need to keep it that way. Those proposals are not a luxury addition to the Bill but are vital and necessary foundations on which to build a modern and effective consumer credit market now and in the future.
	Unfortunately, misconduct will be found in almost any market, and the consumer credit market is no exception, so the Bill ensures that proportionate sanctions are available to the regulators. The importance of those sanctions is not simply that they punish wrongdoing; it is that they are a flexible deterrent to unscrupulous lenders, now and in the future.
	If we enable the regulators to penalise misconduct, we must also enable consumers to resolve disputes for themselves. That means introducing a system that is cheap, fair and easy to use. The alternative dispute resolution system is all of those things. Not only will it empower consumers to act with confidence in the market, it will ensure stable competition throughout the credit sector, now and in the future.
	Hon. Members will be aware how successful the Bill was in Committee. That was due not simply to the hard work of my hon. Friend the Member for West Bromwich, East (Mr. Watson), who unfortunately is not in his place, but to the contribution made by all hon. Members with the detailed knowledge that they brought to the Bill at all its stages.
	I hope that the Government listened to what was saidand we shall continue to do so. That is highlighted by two additional commitments that I have made in response to my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt). In any market there are often key factors beyond even the control of the regulatorsfactors that have the potential to cause consumer detriment. I have acted on the wishes of many and have committed the Government to looking further into the issue of credit card cheques and their unsolicited nature, under secondary legislation. In addition, comments from consumer groups and Members from Scotland have prompted me to act on the issue of lay representation in Scotland. That is another example of the Government listening to and acting on what people say.
	It does not matter where one lives or what one does, consumers should all have the same rights. I hope that I have clarified and reaffirmed the Government's position on some of the more significant points of the Bill. I have no doubt that we will revisit them further, both now and as the Bill progresses through the other place. I hope that it progresses through the other place as swiftly as possible, whatever the Prime Minister's thinking on the date of the general election. I would be sad to see the Bill thwarted in the other place, for whatever reason. The momentum that we have established is important. The industry, consumer groups and all those affected by the Bill understand the need for the discussions to continue. If the Bill were not enacted, that would be to the detriment of consumers, and the industry would not be clear, and would be unable to deal with its rogues.
	The Bill is an important package of reform. It caps the work that has been done over the past four years and brings together the Government's proposals for a 21st-century consumer credit market. It delivers everything that we set out to achieve. It benefits consumers, industry and the regulators, it promotes responsibility and fairness across the sector, it encourages effective competition, and it allows for comprehensive and unbiased enforcement. I commend it to the House.

Stephen O'Brien: I pay tribute to the Minister for his steadfast conduct of the Bill on the basis of careful consideration and patient dealing with the questions raised. I also pay tribute to my hon. Friend the Member for Tewkesbury (Mr. Robertson), who has worked diligently to ensure that the issues have been properly considered, as well as to all my right hon. and hon. Friends who have served on the Committee.
	It has been just over 30 years since the last Consumer Credit Act. Since then the credit market has undergone a process of rapid and radical transformation. The liberalising reforms of the last Conservative Government not only opened up financial markets, but brought new opportunities and new sophistication to consumer behaviour. In general, and importantly in the context of this Third Reading debate, during the past 30 years consumers have become more and more powerful in driving the marketplace. Effective access to credit is indispensable to economic growth. It not only provides a way for people to manage their finances; it enables risk taking and entrepreneurialism, which in turn, via Government revenue, pay for schools and hospitals.
	The present legislative framework governing the consumer credit market might have been adequate for a world in which only one type of credit card was available, but it is certainly not adequate for a world in which there now exists a choice between more than 13,000 such cards. In particular, it is apparent that the extortionate credit test provides, at worst insufficient, and at best unclear, protection to consumers. Indeed, only 10 cases have succeeded under that test since the Consumer Credit Act 1974 was passed.
	As the legislation has become increasingly dated and unsatisfactory, the problem of consumer debt becomes more acute. I am sure that we all know from our constituency casework of debt-related problems tackled by citizens advice bureaux, which do an outstanding job, especially on managing debt that has become difficult or unsustainable, on behalf of our constituents. The number of problems with which the CABs deal has risen by 75 per cent. since 1997. Under the Government, the savings ratio has almost halved and, in 2004, household debt broke the 1 trillion barrier for the first time. As the Bank of England recently warned, with consumer credit running at approximately 1.5 billion a month and increasing by 15 per cent. every year, we are
	building up vulnerabilities for the long term.
	For all the reasons that I have outlined, I made clear on Second Reading my strong support for a new consumer credit Bill to crack down on unscrupulous lenders, make credit agreements more transparent, and provide consumers with an effective means of redress for unfair credit agreements. However, the support of Her Majesty's Opposition was notand never isunconditional. There are genuine and important anxieties about the Bill's timing, the manner of its passage through Parliament, and the significant but somewhat ill defined powers that it will transfer from Parliament and thereby from peoplethe consumersto a policing regulator, who, by definition, is remote from consumers.
	The Prime Minister described the Bill as
	an important piece of legislation,
	but the Secretary of State for Trade and Industry was not here either for today's debate or on Second Reading. However, like me, she was here for Trade and Industry questions earlier today. Her absence is therefore by choice. Of course, I cast no aspersions on the Under-Secretary who is in his place, but we must draw our own conclusions about why the Secretary of State felt that it was not important to present and defend her Bill, which the Prime Minister described as
	an important piece of legislation.
	I fear that the problems of consumer credit and debt are too low a priority for her to trouble to come to the House and take responsibility for the measure.
	Although I am conscious of the strong tone of happy consensus on many aspects of the measureI am not necessarily about to fracture that spiritit is our duty to point out when things are not what they seem and especially when they are not supportable. The delay in introducing the Bill to tackle the menace of unsustainable delay can be explained by the fact that the Government are demonstrably incapable of maintaining spending in line with the growth of the economy, with the inevitable tax rises that that would entail should they be re-elected. I hope that that will not happen.
	The delayed and subsequently somewhat hurried timingI am sure that that has nothing to do with the proximity of a general electionis at least partly because the EU Commission has just announced a consultation on a new draft consumer credit directive. Consumer credit legislation is like buses: you wait for more than 30 years for a new law and then two come along at once. Moreover, the proposed new directive will cover unfair terms, contractual information requirements, licensing of creditors and credit intermediaries. The directive and the Bill therefore deal with similar if not identical issues.
	Parallel legislative proposals from the UK Government and the EU Commissions hold a danger of creating a confused and duplicating legislative structure that places unnecessary burdens on business. That is an especially sensitive matter, given the Government's serious reservations, which I acknowledge, about the draft consumer credit directive. The Department of Trade and Industry's consultation on the directive, which was published last month, stated that the Government
	continues to have concerns with the current draft Directive. We believe that some of the proposals place unnecessary burdens on business.
	It goes on to press for
	substantial amendments to specific provisions contained in the Directive to ensure an appropriate balance between costs to business and benefits to consumers.
	One such provision that the Government would like deleted from the directive is the proposed duty on lenders to advise consumers of appropriate credit products. I hope that the Minister will confirm that the Government, for once, will stand up for British business and make it clear to the Commission that they will not implement the directive in the UK if the amendments that they seek are not adopted.

Michael Fabricant: Is there not the greater danger that the DTI will not only adopt the directive but gold-plate it? The temptation in the UK is always to over-regulate, whereas our European competitors do the oppositeor, at the very least, adopt a directive without any gold plating.

Stephen O'Brien: I am grateful to my hon. Friend, but his intervention should not be interpreted as a criticism of the diligence and expertise of those officials who must deal with the implementation of EU directives into UK law. Although I do not want to go too far down this road, my hon. Friend's question is pertinent and deserves a direct answer. Reconciling administrative and legal systems in all EU member states presents a permanent challenge. In Britain, our legal system causes us to adopt an approach based on means as well as on ends. By contrast, member states in continental Europe have inherited legal systems based more on the Napoleonic code, which leads them to prescribe the ends and to leave the means to discretion.
	The British approach causes us to gold-plate directives, as my hon. Friend the Member for Lichfield (Michael Fabricant) said, and to over-implement them. That is becoming a menace, as it applies friction to the competitiveness of British business. The directive in question directly contradicts some of the proposals in the Bill, and it is important that we draw attention to that. I know that the Government are seized of that already, as they have made their representations on the matter known, but it is worth putting the issue on the record.

Gerry Sutcliffe: I forgive the hon. Gentleman for his attack on the Government, but the consumer credit directive is a serious matter. The first proposal was adopted in September 2002. In all our work on this Bill, we have kept in touch with the industry and monitored how it and other groups have felt about the proposals. However, the potential impact of the directive is outside the scope of the Bill. We had to decide whether to wait for the directive to win agreement among member states, or to get on with work on the Bill, given that 30 years had elapsed since consumer credit was last subject to legislation.

Stephen O'Brien: I understand why the Government have made the judgment that they have made, but I am sure that the Minister will accept that this is a matter of principle and that it is right, in a Third Reading debate, to ensure that it is placed on the record.
	Representations were made to the Government during the consultation process, but the Minister will know that the industry is constantly in touch with members of all parties on these matters. That is understandable, as it sometimes feels that the consultation process with the Government does not carry great weight and that another approach has to be adopted to ensure that matters are given an appropriate airing. The tendency to gold-plate directives identified by my hon. Friend the Member for Lichfield, and the potential discord over implementation are worth putting on the record, not least so that those in the other place are aware of all the issues that have been raised in this debate when it is their turn to consider this Bill.
	As I said, the burdens imposed by this Bill on the consumer credit industry are not insignificant. According to the Department of Trade and Industry's website:
	licence fees will approximately double to around 220 over five years for sole traders and to 550 for incorporated bodies . . . There are also new requirements for provision of post-contract information, which we estimate to be around 1,000 one-off for a small business, 5,000 for an intermediate business and 20,000 for a large business.
	I am also concerned that implementing the provisions in the forthcoming EU consumer credit directive will further jeopardise one of the Bill's aims. I took note of the Minister's saying that the issues under discussion are, in his view, largely outside the scope of the directive as it is anticipated, but that the idea is to make it much easier to challenge unfair loan agreements. On that point, we coincide.
	Already under this Bill, there are at least three ways of dealing with unfair or inappropriate lending practices that affect consumers. They can challenge unfairness through the new unfair relationships provisions in clauses 19 to 22. Under clauses 59 to 61, they can take disputes to the Financial Ombudsman Service for resolution. Alternatively, they can complain to the OFT or to their local trading standards authority, which, under the Bill, have enhanced powers to deal with lenders through a reformed licensing system.
	I am not sure that the Government have necessarily considered the confusion that this array of options could cause for consumers. So I hope that the Minister will explain the basis on which consumers are expected to make an informed choice between the courts, the FOS, the OFT and their local trading standards authority. I hope that he will also confirm today that there are no plans to introduce further options for challenging unfair agreements, if and when the new directive is transposed into UK law. The current options in the Bill seem more than sufficiently widespread, and could already lead to lack of certainty and confusion.
	It is possible to argue that the Government's motive in introducing this Bill and its rather rushed passage through Parliament are unimportant issues. Of course, people will draw their own conclusions, but given the need for such legislation and the general support for it from the official Opposition, from the minor political parties and from business organisations and consumer groups, should we not simply trust this Government, take their word for it and rubber-stamp the Bill? The answer, of course, is no: we cannot and we should not. It is not possible, in my view, to trust a word that this Government say any more, particularly given their addiction to presentation. Moreover, we must scrutinise the Bill as best we are permittedin this House and in the other placegiven this Government's command of the parliamentary timetable. We owe that to those who back the principle behind the Billas, indeed, do webut who have serious and justified doubts about some of the detail, or lack of it.
	In particular, the provisions relating to unfair relationships and the OFT's new licensing regime have given the consumer credit industry cause for concern. As I made clear on Second Reading, I share reservations about the wording ofif not the intention behindthe relevant parts of the Bill, and I also believe that both these provisions reflect this Government's potentially unsatisfactory habit of seeking to empower regulators in order to absolve themselves of all possible blame. This has the twin effect of encouraging regulatory creepthe flow of regulations has increased by 50 per cent. under Labourand of dispersing and undermining proper parliamentary accountability.
	The major Government regulators now spend three times the amount spent before Labour took office, with twice the number of bureaucrats. It is surely unacceptable that, on top of this, the regulators' regulator, the so-called Better Regulation Task Forcea highly questionable titleis forced to admit that there are now so many regulators that no one in government knows how many there are.
	Returning to the unfair relationships provisions in clauses 19 to 22, it is surely a statement of the obvious to say that good regulationnot to mention the comparative better regulation favoured by the Governmentshould set out clearly and simply what is intended and what the obligations of business will be in order to meet the new requirements. The CBI has made clear its view:
	Clause 19, which sets out the substance of the new test, is too wide and too imprecise to bring about necessary certainty and clarity in the legislation. This is particularly when it is combined with Clause 22 (4) which states that when an agreement is challenged on the grounds of an unfair relationship it will be for the creditor to prove to the contrary. This is extreme and provides far too high a burden on traders.
	This lack of clarity is also a serious problem for parliamentarians, who are unable to fulfil their democratic duty to scrutinise Government legislation, as well as for businesses, which face uncertainty as to their new obligations. For those reasons, I specifically asked the Minister on Second Reading for his assurance that OFT guidance on draft relationshipsit is important to make it clear that I am referring to the guidance on draft relationships, not the guidance on fitnesswould be made available before the Bill entered Committee. I would be happy if the Minister were to correct me, but as I understand it, although the OFT draft guidance on fitness was provided in Committee, the guidance on unfair relationships was not. According to the Library, where I checked yesterday, that guidance, which I was promised on Second Reading, was not available in Committee.
	I hope that the Minister will produce that guidance. The matter is important, because it raises the suspicion that the OFT is not ready and has not thought the matter through. I am sure that the OFT is the last organisation that would want to embarrass the Minister, who wanted to make all the information available, and I hope that the explanation does not involve incompetence. We must see the draft OFT guidance on unfair relationships. My hon. Friend the Member for Tewkesbury used the guidance on fitness in Committee, and he has kept me fully informed.
	Whatever the reason why the guidance on unfair relationships was not produced, it damaged our ability to scrutinise the Bill. The Minister is surrendering authority to a regulator that clearly feels no urgent duty to be accountable via him to this House and to the citizens, consumers and businesses represented by hon. Members. I am sure that the other place will focus on that issue, and if the OFT has still not lived up to the Minister's promise, their lordships will be justified in being highly critical and in considering delaying the passage of the Bill. I hope that a delay will not be necessary, but the matter will be taken seriously in the other place.
	We all know that the absence of necessary detail makes for bad law, and that is also true of the  retrospective implementation of the unfair relationships provisions for all existing agreements following a 12-month transitional period. As the guidance in the 1974 Act on extortionate arrangements is being repealed, until the new legislation is tested in the courts, companies have no clear idea of which adjustments they should make. I acknowledge the point about transitional arrangements, but the legislation is designed to enable companies in particular to achieve clarity and certainty, which is why the guidance should be on the face of the Bill.
	The unsatisfactory provisions on extortionate credit are being replaced with, at least in the short term, a legal vacuum. The Council of Mortgage Lenders has said:
	This flies in the face of assurances from DTI as late as September 2004 that while retrospection would be adopted in principle, lenders would not be financially liable for mistakes occurring before the Bill became law.
	Members of the Committee and I have received numerous representations in the same vein from across the consumer credit industry.
	The amendments tabled by the official Opposition would have avoided uncertainty for businesses by ensuring that the provisions would not apply to agreements which were established before the Bill's enactment, and I regret the fact that that the Government did not have the good sense to adopt them. I am confident that their lordships will study the advocacy of my hon. Friend the Member for Tewkesbury in representing those concerns and in providing the Government with an opportunity to restore clarity, fairness and balance in line with the long-held principle and custom that legislation should not, save in the most exceptional cases, apply retrospectively. I foresee that that particular issue will consume much of their lordships' time and expertise, and it could delay the passage of the Bill, although I hope that the Government will avoid that outcome. That serious concern remains unresolved, however, and it continues to generate many representations to me and my hon. Friend.
	The OFT guidance on licensing is available, which is all the more the reason why the guidance on unfair relationships should have been available in Committee. The issue remains that the Secretary of State and the Government will have no direct influence over the OFT once the Bill has transferred powers away from this place. I am not often to be found arguing that Secretaries of State should be given further statutory powers, still less that they should do any more nannying. However, it should not be forgotten that an independent regulator and a Department of state have very different remits. The Department of Trade and Industry has a responsibility to promote the health of the consumer credit industry and business competitiveness in general, while the OFT has a duty, and consequently a regard, only to protect the consumer. There are therefore consequences of transferring powers in the way proposed in the Bill.
	I regret that the Government have resisted the amendment tabled by my hon. Friend the Member for Tewkesbury that would have given the Secretary of State the right by order, subject to affirmative resolution, to vary guidance to the OFT, or issue further guidance, about the issuing of standard licences. Where guidance exists, it appears to be beyond accountability to Parliament; where it does not exist, there is no possibility of adequate scrutiny.
	In Committee, the Minister told my hon. Friend that he did not entirely challenge the statement that the Bill was wholly vague. That sounds to me like a polite waythe Minister is unquestionably politeof partly accepting that the Bill is partly vague. I agree with that. I support the Bill on the basis that the present legislation is badly in need of revision, but I regret the fact that consumers, businesses and Members deserve and require more detail than has been provided in the Bill, particularly on its face. I am confident that the other place will carefully note those concerns, which centre on the Government's reluctance to publish the OFT guidance, at least in draft, in relation to unfair relationships. That is integral to proper consideration of the Bill. In addition, there are the Government's inadequate attempts to justify breaking from long held and well founded parliamentary convention not to legislate retrospectively so long as it is unclear what companies need to do.
	I was struck by interventions during the last group of amendments on Report. The Minister was, in an adjective I used at the outset of my remarks, steadfast in resisting publishing a list of what companies have to do. He was supported by the hon. Member for Gordon (Malcolm Bruce) in the suggestion that there is a cultural issue, which, at least in part, there unquestionably is, but it would be helpful to know whether he has a list that he thinks it would be unhelpful to publish or whether there is no list at all. If there is none, I am even more concerned that the Government are taking a deliberate risk and that it is being left to the courts to set benchmarks, standards and precedents. Inevitably, the difficulty will be that that will be piecemeal. We cannot predict what set of circumstances, what facts, and which plaintiffs and defendantswith what financial resourceswill go all the way through to the courts.
	I hope that the Minister will take note of that important consideration, and that it will get a broader airing in the other place. On that basis, and anticipating their Lordships' consideration, we are content to let the Bill proceed and do not wish to divide the House. We wish the Bill well, but we wish for further clarity and detail in future.

Chris Bryant: I congratulate the Government on an important Bill. From my constituency I knowand others in the House will feel the samethat all too many families and individuals have been caught in a vicious cycle of debt that has made ordinary family life impossible. Sometimes that may be their own fault, and sometimes there are feckless buyers and borrowers. However, in many instances the consumer credit industry has been reckless in the way in which it affords loans and hands out credit cards, making it all too tempting for people to run up debts that they cannot afford and that the credit card companies and loan providers did not know whether they could afford.
	I am grateful to the Government for bringing forward the Bill and to the Minister for the way in which he has handled it. I also thank him for listening to much of our debate in Committee. Although we have not been able to tempt him down the road of being explicit about what he understands to be an unfair relationship, he has none the less made it fairly clear that he hopes that the law will be used robustly and that we will thus row back from the vicious cycle of more loans and debts that are doled out irresponsibly.
	After listening to the speech made by the hon. Member for Eddisbury (Mr. O'Brien), I felt that he had not been kept well abreast of what was debated in Committeeperhaps he could have listened more carefully to his colleague, the hon. Member for Tewkesbury (Mr. Robertson). He inveighed against the Government, albeit in his usual charming way, by saying that unfair relationships are still too vague under the Bill, but he missed the point that the Minister tried to make. If we were to make the provisions too precise, there would be the danger that we would not row back from the culture of over-indebtedness that has grown up over the past 30 years.
	The hon. Member for Eddisbury said that the Bill had been hurried through the House. The programme motion allowed for eight Committee sittings, but we needed only four to provide absolutely adequate scrutiny of the Bill. We had a full exploration of many important issues, so his comments were rather unfair. However, I think that it should be hurried through the next part of its passage so that it will arrive on the statute book.

Gregory Barker: Will the hon. Gentleman give way?

Chris Bryant: The hon. Gentleman has not been here for the rest of the day.

Gregory Barker: indicated dissent.

Chris Bryant: I do not think that the hon. Gentleman has been here all day, but perhaps he has been hiding behind the Dispatch Box and I am being ungenerous to him, so I shall be generous and give way.

Gregory Barker: I might not have been in the Chamber all the time, but I have been present for a significant part of our proceedings. May I remind the hon. Gentleman that I sat through all the Committee? My biggest regret is that the Bill lacks any firm proposals to deal with the aggressive direct marketing of debt. It is all very well to talk about fairness and interest rates, but the Bill does not contain any firm measures to deal with the direct marketing of debt to vulnerable people who are at the end of their tether.

Chris Bryant: The hon. Gentleman was present for all of our Committee sittings, but he cannot have listened to our proceedings carefully, because we had a substantial discussion about that matter. We debated several amendments that I tabled.

Gregory Barker: rose

Chris Bryant: Will the hon. Gentleman contain himself for a moment and let me finish my point?
	There was considerable debate on the matter both in Committee and on ReportI am not sure whether he was in the Chamber for that part of our proceedings. The Committee and the House felt satisfied by the Minister's answer that the unfair relationship provisions would make it perfectly possible for the courts to strike down a credit agreement merely on the basis of irresponsible direct marketing that might have been entered into. We decided that it was better not to insert further measures in the Bill, but to leave the matter open. I do not know whether the hon. Gentleman wants to intervene again; he looks satisfied by what I said.

Gregory Barker: The hon. Gentleman did table amendments and there was a great deal of debate. However, I would not say that all the points that were raised and debated will be dealt with by the measure to which the hon. Gentleman refers. The problem is addressed only partly. People are still worried about the aggressive direct marketing of debt, especially to the most vulnerable people in society.

Chris Bryant: The hon. Gentleman is right about aggressive direct mail marketing and I think that everyone in the Chamber hopes that the industry will correct its behaviour on that. Of course, it has made some movements this year by changing the banking code. However, I hope that courts will feel free to strike down agreements on the basis of unfair relationships due to the feckless and irresponsible way in which a product was marketed. That would be possible if it could be established that the credit card company or loan company had not determined an individual's ability to pay, or had used irresponsible marketing of any kind. I would gently point out to the hon. Gentleman that he did not table any amendments to that effect, so it is slightly difficult for him to argue on Report that the Bill is not adequate because the point had not been met.
	I hope that the House of Lords will consider the Bill with adequate scrutiny, but swiftly. The two main periods of the year when credit card companies and loan companies are at their most aggressive in direct mail marketing are in the run up to the summer holiday period and at Christmas. I hope that we will not have to go through another summer holiday period and a Christmas without new legislation being on the statute book. That being so, I hope that it is possible for the Bill to pass through all its remaining stages in the other place in time for the general election, whenever that may be. Further, I hope that even the Lords Spiritual will consider that this is an important measure. I guess that what we are talking about, in their terms, is the sin of simony.
	Several Members have mentioned the issue of extortionate rates of credit and the change introduced by the unfair relationship. I think that the entire House hopes that the Bill will roll back the vicious cycle of over-indebtedness. This is either a thin thread on which we are hanging a great deal of hope or, as it is to be hoped, the courts will take the Bill in earnest and ensure that it is a hefty rope that is able to bear the burden of our expectations.
	The hon. Member for Eddisbury seems to be suggesting that the Bill will be yet another example of regulation in the context that the Government regulate too much. It is said that we have doubled the amount of regulations since being elected in 1997. However, so many of the measures that we introduce are necessary pieces of legislation. They are added to the list of regulatory measures by the Opposition, even though they support them. The deregulatory measures that we introduce are never taken into account. I believe that we are dealing with an area in which further regulation has been needed for more than a decade, and it is good that it has now been introduced. I hope that the Conservatives will not be wittering on about the over-regulatory nature of the Government.
	My final point

Stephen O'Brien: Good.

Chris Bryant: The hon. Gentleman is in a generous mood this afternoon.
	My final point is that the proof of the pudding will be whether individual members of the public feel that they are able to take advantage of the proposed legislation. I believe that there will be a necessary process of providing information to the public.

Stephen O'Brien: Will the hon. Gentleman give way?

Chris Bryant: I have already been told that I have been going on for too long by the hon. Member, who was whispering in the ear of the hon. Member for Tewkesbury, so I think that it is unnecessary for me to continue any further. Therefore, I will not give way.

Malcolm Bruce: We are completing the passage of the Bill and I think that we have had constructive debates on Second Reading, in Committee and throughout today.
	Many of us have tried to explore the practicalities of how the Bill will work while understanding the process at the heart of the Bill, which is to apply the test of unfair relationship and then set a framework within which that will be determined, rather than to define the Bill in detail. The first problem, if we defined the Bill in detail, is that it would probably be three or four times as long, it would be prescriptive and it would be regulation by Parliament as opposed to regulation by practice, which I think most of us feel might be a better approach.

Laurence Robertson: I suggest that regulation by Parliament, when we can debate it and when it is in the Bill, would be far better. I ask the hon. Gentleman to comment, if I am in order in doing so, on the closing remarks of the hon. Member for Rhondda (Chris Bryant). For the courts to consider whether something is unfair, it will largely be up to the debtor to take the issue to court. I think that I am right in saying that. How many debtors will have the confidence to take a matter to court when it is not even established what will constitute an unfair relationship or agreement? Does the hon. Gentleman agree with me on that point?

Malcolm Bruce: My understanding is that the debtor can take the matter through various routesthrough the Office of Fair Trading, through trading standards or through the ombudsmen. There are various mechanisms. Given the representations that we have had from a variety of interest groups, it seems that test cases will almost certainly be taken up on their behalf. I do not want to be contentious. I think that the Government have set a framework and an approach that is constructive and worth trying. In my view, it might well lead to lower rather than higher levels of regulation.
	I have expressed the view before that the Office of Fair Trading often disappoints us, but we have tried to give that body a framework and a clear understanding of what the Bill is designed to achieve, which it should be able to apply. We hope that it will then produce the practical results that we want, which is to bear down on extortionate and excessive interest rates, to ensure a spread of information better to enable people to take appropriate decisions about credit, and to discourage lenders from reckless lending.
	We have debated all those matters and amendments have been tabled and discussed. We concludedas far as I am concerned, by consensusthat we want the unfairness test to make all that happen and we want better practice established in a relatively short period of time. The reality is that we either do it that way or write every single bit directly into the Bill. From the start, we all accepted, including Conservative Members, that the Bill provides a way forward. Conservatives have always had some reservations but, at the end of the day, we have to go one way or the other: there is no halfway house that could operate consistently. As I have already made clear, my party believes that the ideas of reasonableness and fairness have a wider application and I would contend that they should lead to lower rather than higher regulation. The practice will no doubt test the argument and I am pleased that we will be able to proceed in that way.
	I should like to acknowledge the role of my hon. Friend the Member for Richmond Park (Dr. Tonge), who is unable to be with us today, but who made a useful contribution in Committee. On a slightly wider basis, I should also like to mention my hon. Friends the Members for North Norfolk (Norman Lamb), a member of the Treasury Committee, and for Twickenham (Dr. Cable). They have both been active in making the case for this legislation to combat some of the abuses in the credit market and I appreciate their contributions.
	I am rather intrigued by the style and approach of the hon. Member for Eddisbury (Mr. O'Brien), who comes to this place, rebukes the Secretary of State for not being presentI make no comment on thatand characteristically enters the debate towards the end, making a long and, frankly, boring Third Reading speech, which bore very little relation to our preceding debate. He then raises some issues that have been discussedin particular, he expressed his concern about the need to review regulation. I tabled amendments expressly to deal with that matter, yet the hon. Gentleman's party tabled no such amendments. If he is so concerned about regulation, why did he not ensure that some amendments were tabled about it? [Interruption.] What I am saying is most certainly right.
	I hope that the issue of regulation will crop up again in the other place. Although I cannot order my noble Friends what to do, I want to make it clear, on behalf of my party, that we support the Bill and want it to come into law. We certainly do not want it to get caught up in any of the other arguments that might well be happening in the other place. Such amendments as my noble Friends table will be designed simply to improve the Bill, and the matter of regulation and its review could be one that they will want to deal with further.
	I believe that the spirit in which the Bill has proceeded through the House has been extremely constructive. Many of us do not look forward to taking a Bill through its Committee stage: it is not always the most inspiring part of our work and it can be time consuming and somewhat tedious. However, that has not been the case with this Bill. It has been an interesting and lively process throughout.
	I should like to express my appreciation of the Minister's considerable courtesy. Throughout the different stages of the Bill, he made regular contact with me and, I am sure, with other Members, to inform us of progress and liaise in order to ensure the smooth progress of the Bill. We have all had the opportunity to express our views in an orderly and constructive way. I have to say that the Government could well use the Minister in other Departments[Interruption.] What I am saying is that not every Minister is as diligent and attentive to taking a Bill through Parliament as this Minister has been. It is greatly appreciated. I believe that it helps the Government, the parliamentary process and[Interruption.] I seriously believe that it helps us to produce better legislation and I am happy to put that on the record.
	The Bill will make an important contribution. I shall follow the operations of its mechanisms with interest. I hope that they will be a model for how other matters can be dealt with. I repeat that the outcome should be lighter, not heavier, regulation. I hope that that will happen. It is a good Bill and I am happy to support it.

Graham Allen: I should like to tell the House a story about several hundred Lords and an ordinary person. I have observed the hard work done here today and I have followed it in Committee, and before Members go off for their well-earned rest, they deserve to be tucked in with my story.
	The story concerns an ordinary constituent, Mr. Frederick Jones, who wanted to improve his house, do a better job for his family and ensure that his wife was well looked after. To do that he borrowed 8,500. He now owes 123,000. That is not a fairy story; more like a nightmare.
	Today's Third Reading gives Mr. Jones some hope of a happy ending. I will not give the House the full details of the long story, which stretches over seven or eight years to my certain knowledge. It has been a nightmare for Mr. Jones. He has done nothing to deserve the treatment that has been meted out to him. Indeed, he has paid the original loan many times over. I believe that he has paid back something like 24,000 already on an 8,500 loan.
	The hon. Member for Gordon (Malcolm Bruce) referred to being stuck in Committee. Sometimes it is not the greatest parliamentary perk available. It is hard work. I hope, however, that Committee members feel that their work is valued, not just by other Members, but by many constituents, supporters of Conservative, Labour, Liberal and other parties, throughout the land. All hon. Members have stories similar to that of my constituent. Those people are right to look to us for redress. It is one of the main functions of the House. Committee members and Front-Bench spokesmen have done a great service in their hard-working Committee for many people.
	Several hundred Lords who enter this story at a late point have a great deal on their plate. There are grand issues of state, matters of fundamental import to our democracy and great constitutional issues. As many colleagues have said today, we hope that they do not allow those issues to overtake and suffocate the good work that the Committee and the Chamber have done in progressing the Bill to Third Reading. I hope that the Bill does not become a party political football and get lost in the maelstrom of events in the other place.
	One might say ungenerously that their Lordships may not be involved too much in this end of the loan market and that they might not have personal experience of taking out loans from, not a loan sharklet us call a shark a shark. One might stereotype them and say that they are not particularly interested in this. I refute and reject that. They are interested. I hope that, despite the significant issues on their plate, they consider the story of Mr. Jones while these high matters of state fly between the two Chambers. I hope that they consider seriously the possible rescue of Mr. Jones from his predicament.
	The main reason why I ask their Lordships to think seriously about the issue relates to the important clause on retrospection. We all heard the Meadows family case. It was the fundamental case in reviving the possibility of a reasonableness test on whether a loan was extortionate. I welcome that, and it will be a great relief to many of my constituents. I hope that those who take out loans in future will have a strong ropethe bonds that have already been referred toto help them through any difficulties.
	Retrospection is important for another group of people who, like my constituent, went through the legal process prior to our consideration and prior to the Meadows case. They are entirely dependent on retrospection to obtain justice in their various cases. Much as my constituent wishes the Bill to go forward to help other people, he is dependent on retrospection, as are so many others, to help him to obtain justice. Just looking at the figuresa loan of 8,500 resulting in a debt of 123,000is case enough to make to their Lordships, and I hope that they would consider that seriously.
	Even as an outsider, in that I was not a member of the Committee, although I followed its proceedings carefully, I would like to place on record my thanks for the way in which it conducted its business, and I particularly thank the Minister, who did not just follow his brief but clearly cares about the issues concerning my constituent that I have been trying to raise with him for some time. I also thank the hon. Member for Tewkesbury (Mr. Robertson) for the way in which he marshalled his arguments in Committee, and other members of the Committee.
	The way in which the matter has been dealt with so far shows the exemplary way in which the House helps individuals throughout the country. I hope that their Lordships will take that responsibility equally seriously and give the Bill a fair wind so that it can help people like my constituent.

Gerry Sutcliffe: This Third Reading debate epitomises where we need to be with the Bill and its effect on our constituents. We all know constituents with tremendous debt and credit problems. I shall put the matter in context. We have discussed how matters have evolved since the 1974 Act with increased confidence because we have had a stable economy and people have been able to use credit as a tool for good. I referred earlier to how important it is to consider the amount of disposable income that is spent on personal debt.
	The hon. Member for Eddisbury (Mr. O'Brien) said that debt is a problem and out of control. I do not accept that. The organisations involved in debt relief accept that a small number of people have debt-related problems, but that most people can handle credit as a useful tool. It is important to legislate 30 years on to ensure that the industry acts responsibly with appropriate marketing strategies and that consumers know the full facts of what affects them when they enter an agreement.
	The hon. Member for Eddisbury knows that I always try to be open and to make information available. I am grateful for the comments of the hon. Member for Gordon (Malcolm Bruce). I have tried to keep Opposition spokespeople in touch with developments.

Laurence Robertson: I did not have the chance to speak on Third Reading, but I thank the Minister for the open and courteous way in which he has treated the official Opposition throughout the Bill's proceedings.

Gerry Sutcliffe: In that spirit, if the hon. Member for Eddisbury feels that the issues he raised were not dealt with in Committee, I will write to him about the detail. He referred to guidance and the Office for Fair Trading, and I want to respond to that major point. I wrote to him before the Committee about the OFT and he was kind enough to take the point about its enforcement activity. I think that that is where the confusion has arisen, because we never intended the OFT to decide on the test of unfairnessit will respond to the outcome of the courts' decisionsso there is no list. There can be no list, for the reasons that I have stated, in terms of the unfairness test, but that is not to accept the point that there is no association with unfairness. As I have said throughout the debate, the variety of bodies are clear about what fairness and unfairness mean and I am sure that it is not beyond the bounds of possibility that we can work within that framework.

Paul Farrelly: Does the Minister agree that the Bill in large measure depends for its bite on the effectiveness of the Office of Fair Trading? He will know, because I expressed this in Committee, that I, along with other hon. Members, have some doubts about the historic effectiveness of the OFT. That is particularly the case in relation to an inquiry on late payment chargespenalty charges on credit card holders, many of whom are on very low incomeswhich the OFT has been conducting for nearly a year but for which it still cannot give a concluding date. After this debate, would the Minister, to give Members some confidence, make a point of ensuring that the OFT comes to a fairly speedy although considered conclusion to that inquiry?

Gerry Sutcliffe: I undertake to do that, but my hon. Friend has made the point and he knows that the OFT is regulated. It has to produce an annual report and it has regular meetings with the Secretary of State and me, and clearly we can raise these issues at those meetings. It was Parliament that decided to give powers to the OFT, through the Enterprise Act 2002 and the Competition Act 1998, and I hope that hon. Members will respect that.
	The Bill is a vital piece of legislation and I hope that the other place will recognise that. It is true that there can never be unconditional Opposition support for Bills, but I think it is agreed that this has not been treated as a party political Bill, perhaps with the exception of the contribution by the hon. Member for Eddisbury, for understandable reasons. It has been generally a matter of consensus.

Stephen O'Brien: While we are having a tiny bit of knockabout, let us not lose sight of the fact that Her Majesty's official Opposition are not dividing the House on this issue and indeed are supporting the Bill's progress. I am grateful to the Minister for recognising that he might want to write in relation to some of the points that have been raised. Particularly as, for once, we are not in a time-limited Third Reading debate so we can explore these matters, it is important to state that the letter that he wrote to me, for which I was very grateful, following Second Reading, said that the OFT would provide a note to the House Library, before the Bill reached Committee stage, on the guidance that it would issue. The Library says that it never received that, which is why I was concerned. I am grateful for his explanation, and if it can be made available before the Lords stages I dare say that would help to clear the matter up.

Gerry Sutcliffe: In the same spirit, I will try to clarify the situation.
	I do not want to detain the House, which has not even divided on this legislation. I am grateful for the amount of work that has been done by the Bill team and all those who have been involved. It is important that the House of Lords recognise the spirit of consensus in this place and bear that in mind when it addresses the issues that we have raised. I commend the Bill to the House.
	Question put and agreed to.
	Bill accordingly read the Third time, and passed.

DELEGATED LEGISLATION

Mr. Deputy Speaker: With permission, I shall put together motions 2 to 6.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Northern Ireland

That the draft Company Directors Disqualification (Amendment) (Northern Ireland) Order 2005, which was laid before this House on 20th January, be approved.
	That the draft Insolvency (Northern Ireland) Order 2005, which was laid before this House on 24th January, be approved.

Data Protection

That the draft Data Protection (Subject Access Modification) (Social Work) (Amendment) Order 2005, which was laid before this House on 26th January, be approved.

Audit Commission

That the Code of Audit Practice for local government bodies (2005), a copy of which was laid before this House on 27th January, be approved.
	That the Code of Audit Practice for local NHS bodies (2005), which was laid before this House on 27th January, be approved.[Ms Bridget Prentice.]
	Question agreed to.

DELEGATED LEGISLATION

Motion made,
	That the Town and Country Planning (Temporary Stop Notice) (England) Regulations 2005, (S.I., 2005, No. 206), dated 3rd February 2005, be referred to a Standing Committee on Delegated Legislation.[Ms Bridget Prentice.]

John Randall: Looking at the Order Paper, I was wondering whether the Minister would be able to explain to me and to other hon. Members why this piece of delegated legislation was to be referred to a Committee.

Gerry Sutcliffe: There was a request to do that, and the Government were happy to comply with hon. Members' requests.
	Question put and agreed to.

ITV NEWS PROGRAMMING

Motion made, and Question proposed, That this House do now adjourn.[Ms Bridget Prentice.]

Eric Joyce: The Scottish Media GroupSMGis a highly successful independent media group, which is headquartered in Glasgow, but represented across Scotland. For my constituents, the assets most associated with the company are Scottish Television and Grampian Television. However, SMG is also well known for owning the Virgin Radio, Pearl  Dean and Primesite brands.
	SMG has been on its own news recently for a couple   of reasons; first, because of an active attempt by other interests to purchase Virgin Radio against the wishes of the present boardsomething that, if successful, some commentators have suggested would precipitate the break-up of SMG as a whole. Such a development might have implications for the quality of independent production and broadcasting, including news broadcasting, in Scotland. I shall briefly mention that later. However, my main purpose today is to deal with the main reason why SMG has been in its own and other broadcasters' newsthe group's proposals to opt out of the main UK ITN news bulletin at 22.30, and instead produce a Scottish bulletin to go out on terrestrial television at the same time as the UK version.
	The Minister's locus in all this is, as the House will be aware, that public sector service broadcasting obligations are regulated by Ofcom, and it is for my right hon. Friend to set the framework of that regulation. Ofcom exists under the Communications Act 2003 to ensure that the market delivers the right outcomes. The role of the Department for Culture, Media and Sport is to ensure that the 2003 Act continues to reflect the Government's intended policy.
	Decisions taken by Ofcom, therefore, must be fully independent of the Government, but over time, it is for the DCMS to decide whether the pattern of Ofcom's decisions is in line not only with current regulation, but with what was intended in the current legislation. In addressing this issue, I am neither calling on the Minister to intervene in an area that is Ofcom's preserve, nor to legislate in any way. My intention is simply to ask for an assurance that the Minister and the Department will take account of the processes that are now under way when, in future, consideration is given to whether the legislation should be amended.
	I want to set out the context of the SMG proposals and raise some of their implications for Scotland as a whole. At present, the ITN news bulletin at 22.30, which is fronted by Sir Trevor McDonald, is as much of an institution in Scotland as across the rest of the UK. The main bulletin is augmented by regional programmes, which are different for the two stations: Scottish Television, which covers central Scotland, and Grampian, which covers the highlands. Anyone lucky enough to live in Perth, where I grew up, has a dizzying array of two stations to flip betweena forerunner, I suppose, albeit fairly modest, of today's digital options.
	As I understand it, ITN is the nominated news provider and is contracted to provide a main news bulletin service, which is networked across the independent stations in much the same way as BSkyB is currently contracted to provide the Channel 5 service. I have spoken to colleagues about their constituents' perspectives on the UK-wide bulletin, and on the whole, people seem to have a broadly positive impression across the UK.
	The content of main ITN news bulletins is, of course, a mixture of international and national news stories. As hon. Members know, regional news programmes carrying regional stories augment the main ITN bulletin for each regional licence-holding station. The judgment on what kind of story, and how big a story, gets into the national bulletin, is, of course, an editorial one. However, in general, it is fair to say that, while regional bulletins will run follow-on stories if a nationally covered story happens locally, much of the regional content consists of stories of interest mainlyor onlyto those who live in the local area.
	I said earlier that people across the country have a similarly positive view of the main ITN bulletin, and that is true of the regional programme, too. Although that is true in Scotland, the implications of the mix of regional and national are different from those in the English regions, because of devolution. People in the English regions watch regional bulletins primarily because they are interested in what is going on at local level. However, they are less likely to see international and major news and current affairs through the prism of their localised regional identity.
	Following devolution, with many important powers devolved to Edinburgh, things are different in Scotland. Indeed, in Scotland, Scotland is not generally considered to be a region, but a nation. That can be a little confusing because it is not, of course, sovereign. However, far from the small minority of the nationalist persuasion, many people view themselves as part of two nations: Scotland and, from a sovereign point of view, the UK. That means that there is greater likelihood today than heretofore that people will look out at the rest of the UK through a different lens than they did before 1999, when devolution was delivered by this Labour Government.
	News and current affairs debates in Scotland, just like those about deeper matters of arts and culture, tend to take place along a continuum. At one end, people see everything through the prism of a Scottish identity, and at the other from a UK identity to the exclusion of the Scottish dimension. Some might consider those extreme manifestations of nationalism on one hand and unionism on the other, but the fact is that when considering such issues Scots tend to sit somewhere between the two, striking a good balance.
	Devolution saw the Scottish Parliament take up many of the political issues that from a news bulletin point of view seem closer on a day-to-day, week-to-week and month-to-month basis to the lives of Scots. News and current affairs in Scotland have had to evolve to fit the new political ecology. That has meant, for example, a transfer of news gathering and reporting resources from Westminster to Edinburgh, although it should be said that new resources have been deployed and there has been significant growth in the amount of political news reporting in Scotland, in all types of the media but particularly on television.
	On the whole, technical standards of news gathering and reporting, and all the associated skills of editing, producing and so on, are of a pretty high standard in Scotland. There is a thriving media community and there is a considerable focus in political stories on areas of policy that have been devolved to the Scottish Parliament.
	In addition to legislative devolution and the new configuration of news professionals on the ground, the news agenda in Scotland has been greatly influenced by the creation of many jobs that interface with and inform it. Many of those new jobs are to be found in non-governmental organisations, non-departmental public bodies and of course the voluntary and private sectors. Those organisations have oftentimes up-scaled their Scottish media-orientated operations as a response to devolution. That has tended to create a culture in which people are more likely on a host of domestic issues to look in the first instance for a Scottish rather than a UK perspective.
	At one level, that can be technically very straightforward. For example, debate and development of secondary school curriculums will be conducted on the basis that people are primarily interested in what is going on in Scotland. In the past short while, there has been a great deal of debate about the Tomlinson review, which covered England, but the reportage on the UK bulletins did not always reflect the fact that that had direct implications only for England. Of course, the review will have indirect implications for Scotland, because we hope to share best practice in all professional spheres.
	Against that background, SMG has made a series of proposals. The proposals take into account the fact that some issues in Scotland are not always best covered through a UK lens. It is a moot point whether we can change the way that the bulletins are produced and edited at a UK level so that they are more sensitive. To be honest, that has been the case for some time. However, they cannot always be exactly right; the flavour and tastes will be different, and there is something to be said for proposals that might lead to a greater sensitivity in news values. SMG says that its proposals would produce the benefit that UK bulletin stories that are essentially English could be replaced altogether, or in some cases qualified. So, if there were a 22.30 opt-out bulletin, some stories would not run in Scotland. Other stories would run in Scotland and have their terminology altered.
	The tailoring that SMG proposes in opting out of the 22.30 bulletin and producing its own version would apply also to the next level, and Scottish regional programmes would be produced. Scottish Media Group once owned Scottish Radio Holdings, and thus local radio stations across Scotland. Tailoring of a locally produced Scottish bulletin could broadly reflect the regions, including Edinburgh, Tayside and Grampian.
	My understanding is that Ofcom takes a generally benign view of the proposals to have a greater degree of local variation and to opt out of the 22.30 newsalthough it would still be edited in London, it would be produced and delivered in Scotland. In principle, I regard the proposals as positive. SMG has a strong track record in news and current affairs production. Any misjudgments regarding the purpose or the operation of a new news configuration would probably result in a loss of revenue as fewer viewers switched on and advertising revenue fell. My main concern is to ensure that, as with the BBC Scotland proposals, quality is at the centre of the equation.
	Let me briefly describe the BBC's proposals for the Scottish sixthe 6 o'clock news. There was a great deal of debate in Scotland about whether Scotland should have its own 6 o'clock bulletin and opt out of the UK one. On one side, people argued that to opt out would be to yield to a nationalist perspective; on the other, people said that the standard UK bulletin could be seen as unyielding in the context of devolution. In the end, BBC Scotland decided not to opt out, but its decision was based on resources: it thought that an excessive amount of resources in Scotland would be required to deliver a bulletin of the same quality. Quality was the key variable, and I generally agree with the decision.

Angus Robertson: I am following the hon. Gentleman's argument with close interest, as one who used to report for the BBC and is keen to see the best news agenda delivered to all viewers, regardless of where they live. Is he saying that, in principle, if there were no technical objection and no financial impediment and if Ofcom and the BBC agreed that all bulletins could be produced with Scottish viewers in mind and with the right news order for Scottish viewers' interests, all bulletins in Scotland should be assembled in that way for both the ITV network and the BBC?

Eric Joyce: That is a perfectly reasonable comment. In my view, such decisions are for professionals to takethe judgment is an editorial one. I am not hung up on the precise configuration. What I want is the right kind of service to be provided to my constituents. BBC Scotland's decision was essentially correct, but ultimately it was an editorial judgment made by the experts in the field, not a political judgment.
	I shall not attempt a comprehensive definition of quality. Suffice it to say that it should cover the standards of news gathering and reporting, as well as some sense of perspective. If an unintelligent approach were taken to changing the configuration, some vested interests might, in particular political contexts, take advantage. Quality must be safeguarded; it sits at the heart of the issue.
	As a commercial organisation, SMG must square its obligations to produce quality news programming with its obligations to its shareholders. It may well be that in discussions with Ofcom about licence renewal, SMG will seek to acquire additional resources or to recoup some of its lossesthe costs will increase considerablythrough negotiation of the price of the renewal. I do not know what position Ofcom will take in that respect. I have an open mind. I realise that Ofcom has to be even-handed across the network, but I believe that SMG should be given a chance to put its case. Public moneyor, if the price is lowered, public money forgoneis involved, but if SMG makes creative proposals, which I believe are worth examination, albeit with some caution, there should be the possibility of Ofcom considering the price of renewal. I believe that there are other devices that could help to establish a new system, but it is technically possible for Ofcom to accept a lower price for the licence.
	My final point is not tangentialI am sure that you would call me to order if it were, Mr. Deputy Speakeras it concerns output in Scotland. SMG faces a hostile bid for one of its important assets, and some people are concerned that a successful takeover of Virgin Radio by a single interest could precipitate the break-up of SMG. SMG stations deliver about five and a half hours of news output every week, which is well above the average. In England, it appears that news output will be reduced, which would be a pity. SMG, however, is committed to maintaining its output. It is not for politicians to make unnecessary interventions in the market, but I would like to be confident that if SMG were broken upI do not think that that will happen soonthe new owner would maintain the obligation to produce a high news output in Scotland. There is great appetite in Scotland for news, not least because of devolution. That is a positive development, and I hope that whether or not the SMG empire stays togetherconflicting views on the issue are expressed in the financial press every daytotal news output across Scotland will remain the same.
	Much of this is initially in the domain of Ofcom, but it is for the Minister for the Arts and the Department for Culture, Media and Sport to watch what happens carefully to see if there are dysfunctions resulting in undesirable outcomes for people across Scotland and the country. Such things should be taken into account when legislation is introduced. I should therefore be grateful for an assurance from the Minister that notice will duly be taken of the matters that I have raised.

Estelle Morris: I welcome the opportunity to respond to the Adjournment debate secured by my hon. Friend the Member for Falkirk, West (Mr. Joyce). He was correct to say that initially these are matters for Ofcom. Having introduced the relevant legislation, the Government should leave the regulator to get on with it. I accept that it is the Government's responsibility to make sure that legislation is effective. It is early years for Ofcom, but that process will take place.
	We should approach our debate as a message to Ofcom. It is entirely proper and welcome that we hold such debates in the House, but I am not in a position to reply on its behalf. To provide a context for the SMG proposals, I shall set out the legal strategy behind the Communications Act 2003 and Ofcom's guidelines. This is essentially a Scottish issue, as the hon. Member for Moray (Angus Robertson) said. Both local and national politicians know that news is incredibly important, and all the evidence shows that news broadcast on television is more likely to be considered a straightforward and objective representation of events than news in the newspapers. I share that view.
	Interestingly, every survey that has taken place shows that people rate local news services most highly. That is not to say that they do not want national coverage, but they rate local news services most highly. The BBC's regional news at 6.30 pm is the most watched news programme. Having said that, I accept what my hon. Friend said about the importance of national news. I do not want to go into what the Scottish electorate might think is more appropriate for them, but I will refer to the SMG proposals at the end.
	Because of the importance of news, both local and national, the Communications Act 2003 gave Ofcom the duty to ensure that all licensed public service channels include high quality news and current affairs programming, covering both national and international matters. That may be helpful to my hon. Friend, given his reflections during the debate on national news and the coverage of international matters, and, I suspect, the interface between local and regional news. Clearly, in some instances there will be news that is both local and national, depending on who is listening to the broadcast, so sometimes it may be difficult to draw the dividing lines. Almost in defence of democracy, we need high quality regional news, as local as it can be, but national news to give us that sense of national identity and to enable everyone to take part in democratic processes.
	What my hon. Friend did not touch on, but a matter that is very much behind this debate and which was particularly relevant to yesterday's announcement, is that the debate about how news is broadcast and what news is broadcast, at which time of the day and for how long, is very much governed by the great changes that are taking place in broadcasting and will continue to take place during the next 10 years.
	Ofcom has two responsibilitiesfirst and foremost, to ensure that the duty to make sure that licensed public service channels include high quality news and current affairs programming is kept to, but at the same time not to fail to understand that that public service news broadcasting obligation takes place against the background of many more digital channels, and that without doubt people's increasing decision to access digital channels has an impact on the public service broadcasters.

Angus Robertson: That is exactly why SMG's idea is so interesting. Anyone watching STV or Grampian on one channel in Scotland would be able to watch main news bulletins from a Scottish perspective covering Scottish, UK and international affairs, and at the same time, if one wanted to watch the network UK-produced programme, one could do so on another digital channel. No one would lose anything; everyone would gain something through being able to make a choice.

Estelle Morris: I see the point in that. There is then the issue on a commercial station such as SMG, as opposed to the BBC, of the point at which the number of people buying into digital channels are not choosing to watch news programmes on SMG, for example, making them financially unviable, or the price that is being paid for a bit of the channel not being worth the money. Then we might get to the situation where the only people with such a public service obligation would be the BBC. Certainly one of the obligations of Ofcom is to ensure that there is a competitor with the BBC for regional news programmes. It is an interesting debate as to whether in this week of all weeks one could say of the BBC, That is our public service broadcaster; the others need not be bothered with that. At the moment, we want that competition, and Ofcom must ensure that there is that competition between the BBC and ITV. ITV has a duty to provide a high quality nationwide news service capable of competing with the BBC.
	To some extent, during the next five to 10 years, we will have to work out those three mattersthe role of the BBC as a public sector broadcaster; the role of commercial television as a competitor in terms of its public service broadcasting obligations; and at the same time the digital channels coming in will give members of the public that very choice with which the hon. Member for Moray is concerned. No doubt the debate will continue.
	I should like to comment on the review that Ofcom has recently conducted, although I shall not go into too much detail. As hon. Members will know, the review is in three parts, and looks at how public service channels honour their public service obligations and speculates on how that might change with the digital outcome. Last week the third part was published, on how we ought to move forward in the evolving the digital market.
	One of the major conclusions was that our targetsthe quota on allocation of time for local newsshould remain. That is an incredibly important part of the infrastructure for Ofcom. The obligation of five and a half hours of local news a week should remain. If we consider the issue historicallyand we do not have to consider it too historicallywe see that the amount of time has actually fallen, which has always concerned me. That is why the bottom line of five and a half hours is incredibly important as we work out the challenges and how to respond to broadcasting over the next few years.
	ITV spends more than 100 million a year on news provision, which includes more than five and a half hours of local news a week. That equates to more than 3,000 hours a year, across 15 ITV regions and 27 sub-regions. Many in the industry wonder whether that is financially sustainable in a digital multi-channel market.
	The amount of local and national news broadcast is one issue, but my hon. Friend the Member for Falkirk, West also talked about quality. We must do two things: monitor the amount broadcast, but also consider the quality of what is broadcast. The SMG's proposals address the latter part of that analysisthe quality of what is broadcast.
	SMG, the operator of both Grampian and Scottish Television, suggests that the requirement to broadcast a half-hour lunchtime bulletin in the Scottish Television region should be removed. The evidence on who watches what shows that the lunchtime bulletin receives only an 11 per cent. share of the audience, whereas the evening local news bulletin receives a 24 per cent. share. Just as an observation, the issue is something for SMG to work out and put to Ofcom. The decision to cut one bulletin and put resources into the other is a response to what the evidence shows. In the SMG's view, the issue is about quality and it is saying that it can fulfil its public service obligation, but at the same time if it moves the resources about, it might be able to put more resources into the news broadcasts that people watch more. In the debate about how SMG fulfils its obligation, it is important to remember that the question is not only whether, but how.
	As my hon. Friend said, SMG submitted two proposals to Ofcom. The first proposal, which he addressed for most of his time and in which he has a particular interest, is for SMG to explore a micro-regional news service, using the latest technology to provide opt-out services across its coverage areas. That would provide a more local service to a specific area, instead of the one currently provided by a regional service.
	The second proposal is to work with ITN to develop what SMG callsthese were the words that my hon. Friend used alsoa tailored Scottish version of the 10.30 pm UK and international news. There are no plans at this stage to opt out of the 6 pm bulletin. That service would feature largely the same material as elsewhere in the United Kingdom, although it could be re-edited or omit stories of less relevance to Scotland.
	The agenda that SMG has outlinedI welcome the tone with which my hon. Friend introduced the debateis an interesting proposal for the way ahead which secures the minimum number of hours of local and national news and responds to what the evidence says about what people want to watch. However, the proposals also extend into the debate about what is national news and what is regional news under devolved Government, where there is both a strong Scottish national identity and a strong United Kingdom identity. I am pleased that SMG has made this proposal, as it is exactly the sort of thing that we need to discuss. We cannot say that there will be no change, but we do need a bottom line that is non-negotiable. As a Minister, I welcome the SMG proposals, in that they open up consultation and a wider debate.
	Although I do not want to say that I approve the content of the proposals, I believe that it is entirely proper for Ofcom to offer them for consideration. I come from Birmingham, which is situated in the west midlandsthat is, in the middle of the UK. Strangely enough, the debate there about national news as opposed to regional news is the same as the debate being held in the other nations of the UK.
	The comments made in this debate by my hon. Friend the Member for Falkirk, West and the hon. Member for Moray are relevant to the consultation process, which ends on 19 April. I suspect that this is not the last that we shall hear of this matter, but I end by confirming that this House has a responsibility to ensure that all our constituents, wherever they live, have access to high-quality national, international and regional news. How that news is delivered will change over the next 10 years as the technology develops, but that is also a good thing.
	I am pleased to have had the opportunity to reply to this short debate this evening.
	Question put and agreed to.
	Adjourned accordingly at fourteen minutes to Six o'clock.